Hiring missed economists’ payroll forecasts, with just 199,000 jobs added in December, lower than November’s meager gains of 210,000, according to the U.S. Bureau of Labor Statistics (BLS) report on Friday (Jan. 7). The unemployment rate dropped to 3.9% from November’s 4.2%
Wall Street Journal economists were forecasting 422,000 new jobs added in December, while Bloomberg expected 447,000. Bloomberg anticipated the unemployment rate would be 4.1%, per media reports.
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Jobs added continued to trend upward in the leisure and hospitality sectors; professional and business services; manufacturing; construction; and transportation and warehousing, according to the BLS report.
The omicron variant of COVID-19 didn’t have an impact on December hiring but was expected to weigh on January’s numbers.
“The economy right now is in a good spot and is resilient enough to withstand this COVID surge,” Julia Pollak, economist at jobs website ZipRecruiter, told the Wall Street Journal. “We just expect the year to bring a more moderate, sustainable pace of recovery and growth.”
If cases of the virus continue to climb at the rate reached earlier this week, it could mean that close to 5 million workers reflected in the January report could be listed as absent from work due to illness, Pollak said.
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About 1.5 million employees were listed as absent from work because of illness in November, according to the BLS.
Because of the highly contagious nature of Omicron, millions of sick workers are being quarantined, which is compounding labor shortages.
“Job gains in leisure and hospitality and education slowed significantly in November as rebounding delta cases suppressed jobs growth,” Daniel Zhao, Glassdoor senior economist, said in an email. “Weaker growth in COVID-sensitive sectors will likely have continued in December as the resurgent delta wave gave way to the new omicron wave.”
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