A huge miss on jobs numbers, but pretty good news on everything else in the December 2021 jobs report.
The U.S. economy added far fewer jobs than expected in December just as the nation was grappling with a massive surge in Covid cases, the Labor Department said Friday.
Nonfarm payrolls grew by 199,000, while the unemployment rate fell to 3.9%, according to Bureau of Labor Statistics data. That compared to the Dow Jones estimate of 422,000 for the payrolls number and 4.1% for the unemployment rate.
Stock market futures edged lower following the report, while bond yields were in positive territory though off their highs of the morning.
Job creation was highest in leisure and hospitality, a key recovery sector, which added 53,000. Professional and business services contributed 43,000 while manufacturing added 26,000.
The unemployment rate was a fresh pandemic-era low and near the 50-year low of 3.5% in February 2020. That decline came even though the labor force participation rate was unchanged at 61.9% amid an ongoing labor shortage in the U.S.
A more encompassing measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons slid to 7.3%, down 0.4 percentage points. Though the overall jobless rates fell, unemployment for Blacks spiked during the month, rising to 7.1% from 6.5%. The rate for women 20 years and older fell sharply, to 3.1% from 3.7%.
"The new year is off to a rocky start," wrote Nick Bunker, economic research director at job placement site Indeed. "These less than stellar numbers were recorded before the omicron variant started to spread significantly in the United States. Hopefully the current wave of the pandemic will lead to limited labor market damage. The labor market is still recovering, but a more sustainable comeback is only possible in a post-pandemic environment."
Average hourly earnings rose more than expected as the U.S. sees its fastest inflation pace in nearly 40 years. Wages rose 0.6% for the month and were up 4.7% year over year. That compares to respective estimates of 0.4% and 4.2%.
While the establishment survey showed much lower than expected job gains, the household count told a different story, with a gain of 651,000. There also were upward revisions for prior months, with the final October tally pushed up to 648,000, an increase of 102,000, while November's disappointing report gained 39,000 in its first revision to 249,000.
So unemployment is back under 4%, and we still added 200,000 jobs in December, with wages up 4.7% for the year. The bad news, inflation was up by almost twice that, so yeah, Americans felt that in their pocketbooks for sure, and it's definitely hurting Biden's poll numbers.
We'll see where we go in 2022. The broad forecasts are for the economy to cool off from "hurtling towards the stars" to just "pretty good" and to lower inflation along with it. If that happens, things will improve for average Americans and oh yeah, for the Democrats.
Because you know what? 2021 was actually a great year economically.
6.4 million jobs created in one year: a new record
— Jesse Lee (@JesseLee46) January 7, 2022
Unemployment rate drop from 6.2% to 3.9%: a new record
This was the greatest jobs growth year in modern American history, and it’s not even close.
But remember, the GOP wants you to think the economy is miserable, and it's just not. As I mentioned above, inflation sucks, but also 6.4 million jobs since Biden took office, so the miss this month actually is a drop in the bucket in the year that was 2021.
Keep that in mind.
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