Editor's Note: This report is based on survey data from November 2021 that was published in December 2021. This is the most recent data available. (Source: Bureau of Labor Statistics)

The short story is that the U.S economy added 210,000 jobs last month, bringing the unemployment rate down from 4.6% to 4.2%. 

At this level of unemployment in the past, adding more than 200,000 jobs has often been assessed by economists as a strong indicator of a well-functioning economy. Despite historical precedent, however, the framing of this jobs report was notably less positive. 

One key piece of context for understanding these figures, as always, is how the reported jobs numbers compare to expectations. In this case, the jobs figures fell well short of the general economic forecast, which expected nearly twice as many new jobs to be added. This discrepancy alone could explain much of the negativity expressed in the December report. 

Still, and as with all of these reports produced by the Bureau of Labor Statistics, the jobs numbers for last month will continue to be revised in the coming months as more accurate data is collected and analyzed. With 2021 coming to a close, it’s entirely possible that last month’s jobs numbers may ultimately meet or exceed expectations after all. 

Whether or not such upward revisions are in store for last month’s newly added job figures remains to be seen, but the consistency of the initial undercount throughout most of the pandemic is additional context that should be weighed. 

The industries where most of these new jobs were concentrated include professional and administrative services, which saw the most new jobs at +90,000. The transportation and warehousing industry registered 50,000 new jobs, while the construction and manufacturing industries added 31,000 new jobs each.

Interestingly, retail employment lost about 20,000 jobs last month, perhaps as a reflection of consumer behavioral response to increasing concerns over the viral omicron variant. Then again, food and beverage employment, which has been one of the hardest-hit industries throughout the Covid-19 era, continued to see growth last month, with new jobs offsetting nearly half of last month’s retail job losses. 

Mployer Advisor’s Take: 

As noted in the paragraphs above, context is crucial to understanding the underlying meaning of a jobs report, including the recognition that thorough economic analyses must extend beyond unemployment rates and the number of new jobs created in a given month. 

Although few industries have recouped all of the jobs accounted for prior to February 2020, concerns about the unemployment rate lately have become overshadowed by concerns about inflation. While the workforce remains down about three million people from pre-pandemic levels, it’s estimated that about half of those people have retired with no plans of seeking future employment. 

The big questions at hand currently involve the other half who are not necessarily believed to be permanent retirees, but whose working plans for the future remain unclear or unknown entirely. 

A strong unemployment rate coupled with climbing inflation indicates that the Federal Reserve may shift its present course and consider raising interest rates to suppress the reality of rising inflation. If so, the operative question becomes less about “if” the Fed will raise interest rates and simply “when.”

For state specific employment data, click here to access our Market Employment Summary

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