Editor's Note: This report is based on survey data from December 2021 that was published in December 2021. This is the most recent data available. (Source: Bureau of Labor Statistics)
The U.S. economy added almost 200,000 jobs last month, bringing the unemployment rate down from 4.2% to 3.9%.
This 0.3% monthly reduction is somewhat slower than the 0.4% reduction that was initially reported the month prior. Still, it’s important to note that subsequent reports for each of the past six months have adjusted the total jobs added figures upward by an average of 125,000 jobs each month. Given the ongoing pandemic-related data collection issues that have caused these discrepancies–and the consistent underreporting over the last half of 2021–it is also reasonable to assume a similar adjustment may be required for the current report.
That being said, this month’s report features a milestone, with the unemployment rate dipping below 4.0% for the first time since the pandemic struck. For reference, the unemployment rate was 3.5% in February 2020. Although the unemployment rate still has some room for improvement, it is heartening to see the rate back within a comfortable range that (historically) has been viewed as an indicator of economic prosperity.
In total, the number of unemployed people in the U.S. decreased by almost half a million jobs, bringing that figure to 6.3 million. Given that the total number of unemployed people in the U.S. was approximately 5.7 million before the pandemic, it’s very likely that this figure could hit or fall below pre-pandemic levels within the coming months.
The industry that added the most new jobs last month was leisure and hospitality, with over 50,000 new jobs. Despite these gains, however, there are still 1.2 million fewer jobs across the industry than there were before the COVID-19 pandemic began.
Other industries with strong new job additions include the following: business and professional services (+43,000); manufacturing (+25,000); construction (+22,000); and transportation and warehousing (+19,000).
Mployer Advisor’s Take:
As noted above, many aspects of the economy continue to enter the familiar ranges of pre-pandemic life. While the ranges and metrics may be similar, however, there may be some large differences between pre-pandemic normal and post-pandemic (or endemic) normal.
For instance, the regular threat of new strains from the COVID-19 virus continues to evolve, though the ultimate effects of these threats may vary widely based on factors such as communicability, severity, and vaccine/treatment resistance.
Currently, the Omicron variant appears on track to meet or exceed case numbers mirroring the peak of the pandemic–the economic effects of which won’t be captured until next month’s economic release. We know the impact a viral wave of that magnitude can have, but what remains to be seen is how well the economy has adapted to better withstand its effects.