Employers added a lackluster of 199,000 jobs in December which is significantly lower than the expectations of the economist. As a result, the unemployment rate fell to 3.9%, according to the Department of Labor on Friday.
The unemployment rate in the month of December fell back again as compared to November as the micron variant fueled coronavirus cases surge makes a comeback.
The unemployment rate further dropped to 3.9 yet the hiring in December slowed down.
The Labor Department released a report on jobs in December which stated that,
- Non-farm payrolls: +199,000 vs. +450,000 expected and a revised +249,000 in November
- Unemployment rate: 3.9% vs. 4.1% expected and 4.2% in November
- Average hourly earnings, month-over-month: 0.6% vs. 0.4% expected and a revised 0.4% in November
- Average hourly earnings, year-over-year: 4.7% vs. 4.2% expected and a revised 5.1% in November
According to the report, the service-related sectors were the most severely affected by the pandemic and saw almost zero to no hiring in December.
A good start was observed in leisure and hospitality jobs which rose by a whopping 53000 compared to 41000 in November.
The majority of the industries like transportation, warehousing, business and professional services providers, and the education and health sector saw a decline in new jobs hiring in December.
Only the retail trading employers were the sector where the job hiring remained constant in the two months of November and December.
According to the economists, as the cases surge across the country because of the new variants, the exact impact of the new cases on the market will be shown in the January reports.
Analysts stated that it is still too early to capture the exact figures of disturbances caused by the omicron variant across the United States of America.
“While the 199,000 gain in non-farm payrolls once again disappointed the consensus, a much larger gain in the household measure of employment and a tepid rise in participation pushed the unemployment rate back below 4%,” Michael Pearce, senior U.S. economist for Capital Economics, wrote in a note on Friday. “Together with another exceptionally strong monthly increase in wages, that raises the odds the [Federal Reserve] brings forward plans to raise interest rates and run down its balance sheet this year.”