Jobs report shows employers nervous about variants
The November jobs figures point to a job market and an economic recovery that looks resilient though under threat from a spike in inflation and the potential impact of the coronavirus. (Dec. 3)
Hiring slowed sharply for a second straight month in December, with employers adding just 199,000 jobs, as the omicron variant began driving COVID-19 cases higher.
The unemployment rate fell, which is calculated from a different surv from 4.2% to 3.9%, the Labor Department said Friday.
Economists surveyed by Bloomberg had estimated that 444,000 jobs were added last month.
A modest consolation: Job gains for October and November were revised up by a total 141,000, though November’s sluggish 210,000 was nudged up by just 39,000.
For all of 2021, the economy added a record 6.4 million jobs, or 537,000 a month, as the nation continued to recover from the unprecedented losses caused by a pandemic-induced recession and shutdowns of 2020. So far, the U.S. has recouped 18.8 million, or 84%, of the 22.4 million jobs lost early in the pandemic, leaving it 3.6 million jobs shy of its pre-crisis level.
The omicron surge could delay that recovery in the short term. The strain propelled daily COVID cases above 1 million this week, shattering previous records, but most analysts reckoned it occurred too late in the month to dampen the government’s December survey, which is conducted the week that includes the 12th.
Meanwhile, job growth appeared set for a healthy rebound from disappointing November gains as widespread worker shortages eased slightly. The expiration of enhanced unemployment insurance in early September failed to immediately lift employment gains, but Goldman Sachs expected a bounce last month as many of the 4.6 million workers who lost benefits resumed their job searches.
And unseasonably warm weather in early December likely juiced job increases by as much as 100,000, Goldman estimated, as industries such as construction added lots of workers.
But the December report likely reflects the calm before the storm. Omicron is expected to significantly slow job gains early in the year as workers again pause job hunts and shoppers curtail spending on dining out and other activities, says economist Lydia Boussour of Oxford Economics.
“As we enter 2022, near-term labor market prospects are dimming amid a tidal wave of Omicron cases,” Boussour writes in a note to clients.
Vaccination mandates by private employers as well as coming or recent government vaccination mandates for certain groups of workers also pose a risk for job growth as some workers who refuse to get vaccinated quit.
Homebase, which supplies payroll software to small businesses, said the number of employees working and the number of hours worked declined last month.
The good news is the variant appears far less severe than the previous delta strain and is likely to peak in the next few weeks and peter out by March, health experts say. That should set the stage for slower but still booming employment gains of about 330,000 a month this year, according to Moody’s.
Megan Shroy, CEO of Columbus-Ohio-based Approach Marketing, expanded her staff of full-time workers and contractors by about 40% last year and expects to grow it by another 20% in 2022 amid surging demand. Clients, she says, are still making up for cutbacks in their public relations and digital marketing outlays in 2020, when the health crisis upended the economy.
Shroy says she hasn’t been affected by the labor shortage because all her employees work remotely and she allows them to toil flexible hours and part-time if they need to, catering to a new COVID-spawned mindset that balances work and personal life.
“We’re getting a lot of candidates (from companies that are requiring employees to return to the office) who are saying, ‘This what I prefer.”