Economy adds disappointing 199K jobs in December as omicron emerges
The U.S. added 199,000 jobs in December as the omicron variant of COVID-19 began to spread through the country, according to data released Friday by the Labor Department.
While the unemployment rate fell to 3.9 percent in December from 4.2 percent in November, last month’s job gain fell far short of projections. Economists expected the U.S. to have added roughly 420,000 jobs last month after several weeks of low unemployment claims and signs of strength from private sector payrolls.
Despite the lackluster December job gain, the report showed signs of growing competition for sorely needed workers as employers struggle to keep up with the recovering economy. The jobless rate dropped to its lowest level since March 2019 as the labor force participation held firm, and average hourly earnings were up 4.6 percent on the year last month.
The Labor Department also revised October and November’s job gains up by a combined 141,000 jobs — the latest major upward correction of a disappointing initial report.
“Once one accounts for upward revisions to the past two reports,” said Joe Brusuelas, chief economist at tax and audit firm RSM, “the change in total employment is 390K. While that is disappointing to the trading community, that is quite strong from the point of view of the underlying real economy.”
The December jobs report likely reflects little of omicron’s full impact on the economy. The two surveys conducted by the Labor Department to compile the employment figures occurred the week of Dec. 12, well before cases began spiking in major U.S. cities.
Several industries under pressure by the pandemic saw little to no job growth in December, a troubling sign as COVID-19 cases spike.
The leisure and hospitality sector gained just 53,000 jobs in December, well short of the six-digit monthly gains seen earlier in the year. Employment in health care and retail flatlined last month, while manufacturing, construction and transportation services all saw solid job gains.
Updated at 9:05 a.m.