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Saturday, January 22, 2022

Hiring falters in December as payrolls only increased by 199,000, though unemployment dips to 3.9%

The Labor Department said on Friday that the US economy added fewer jobs than expected in December as the country grapples with a surge in Covid cases.

According to data from the Bureau of Labor Statistics, non-farm payrolls increased by 199,000, while the unemployment rate fell to 3.9%. That compared to the Dow Jones estimate of 422,000 for the payroll number and 4.1% for the unemployment rate.

Stock market futures edged lower after the report, while bond yields were in positive territory, albeit off their morning highs.

Job creation was highest in leisure and hospitality, a key recovery sector, adding 53,000. Professional and business services contributed 43,000 while manufacturing added 26,000.

The unemployment rate fell to a fresh pandemic-era low and a 50-year low of 3.5% in February 2020. The decline came even as the labor force participation rate remained unchanged at 61.9%. A more comprehensive measure of unemployment that includes depressed workers and those holding part-time jobs for economic reasons fell 0.4 percentage points to 7.3%.

Average hourly earnings rose higher than expected as the US sees its fastest inflation rate in nearly 40 years. Wages rose 0.6% for the month and 4.7% year over year. This compares to the respective estimates of 0.4% and 4.2%.

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While the establishment survey showed a much lower than expected job gain, the household count told a different story, yielding 651,000. There were also upward revisions for the previous months, with the final October number rising to 648,000, an increase of 102,000, while November’s disappointing report saw its first revision rise to 249,000.

Job gains in other sectors include construction (22,000), transportation and warehousing (19,000) and wholesale trading (14,000).

The numbers come at a crossroads for the US economy as more than half a million Covid cases per day, many related to the Omicron version, threaten to halt an economic recovery that looks to accelerate in 2022.

While growth declined during the summer, economists expect year-end GDP to rise sharply, with the Atlanta Fed tracking growth at 6.7%. Federal Reserve officials are watching the data closely.

The central bank has indicated that it will begin to slow down the help it has been providing to the economy since the start of the pandemic.

Friday’s report covered the weeks, including December 12, ahead of the worst of the Omicron spike leading up to Christmas.

This is breaking news. Please check back here for updates,


World Nation News Deskhttps://www.worldnationnews.com
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