December’s Labor Department jobs report was a mixed bag.
Though the 199,900 new jobs missed economist estimates of 422,000, the lackluster growth was enough to send the unemployment rate from 4.2 percent to 3.9 percent, a new pandemic-era low.
Retail employers added to the December slowdown by shedding some of the temporary workers they hired to handle the holiday rush, though that process typically begins at the turn of the new year. However, shoppers who started buying early to get ahead of retail’s well-publicized supply chain problems and inventory shortages drove brisk holiday sales while leaving employers with little need for extra staff come Dec. 26.
The Labor Department’s report disappoints compared to ADP’s data showing 807,000 jobs joining December’s private-sector payrolls. Each uses different tools to crunch its data, however.
One interesting development is that more women ages 25 to 54 entered the workforce in December. Despite the low jobless rate, the U.S. is still short 3.6 million jobs versus February 2020, the last month before covid disrupted the economy.
Last year’s job gains were the highest since the government began keeping records in 1939. But there are signs that job growth might be slowing. November’s upwardly revised gain of 249,000 marked a sharp slowdown from October’s 648,000 new jobs.
The rapidly spreading Omicron variant could be a factor behind depressed job growth in retail and the in-person service sector at large, according to Gad Levanon, head of The Conference Board’s Labor Market Institute. Data coming out next month for January’s nonfarm payroll report could provide a more complete picture on employment trends for 2022.
In the meantime, first time jobless claims totaled 207,000 for the week ending Jan. 1, according to data published Thursday, higher than the 195,000 economists projected.