For the last several months hope has often exceeded expectations for the US economy, and now after being buffeted by supply bottlenecks and shuttered oversea factories producing semiconductors and computer parts, the positive outlook for jobs seemed on an upward trajectory, but on Friday, the US Labor Dept. released its monthly jobs report showing a disappointing 199,000 jobs for December.
Following thes rise and fall of the jobs report has begun as a see-saw, and has evolved into an anybody’s guess, especially with an unemployment rate of 3.9. But, of course this is the marquee rate, with more accuracy coming in from the household survey which shows continued movement, but still not as strong as it would be in a “normal” month, that is pre pandemic.
We’ve seen the effects of the Delta Variant in prior months, but we can only guess at the effect of Omicron, since the report was garnered in the week of Dec. 12; but many economists and observers remain flummoxed at the decline and some rough guesses are being made to the continued path of resignations among many working classes, especially those at the service level looking to end physically demanding jobs that take them away from their families for long hours.
The labor force participation rate remained unchanged from November at 61.9 causing many to wonder what kept it the same with resignation coupled with retirements, many of which were early. The answer may lie in this: that for those that retired, jobs were kept with the greater bargaining power that job seekers have with employers, causing little movement.
Adding to the conundrum is that the jobless rate was its lowest rate since March 2019, and significantly wages were up 4.6% over the year, welcome news but probably attributable to that same bargaining power.
Some optimism has been seen, according to The Hill, who reported that accounting for the two upward revisions for October and November, to 141,000 with Joe Brusuelas, chief economist at tax and audit firm RSM, stating “the change in total employment is 390K. While that is disappointing to the trading community, that is quite strong from the point of view of the underlying real economy.”
Of significance is that leisure and hospitality gained only 53,000 jobs, possibly reflecting that area’s resignation, and health care was flat seemingly due to lack of interest in an area besieged by Covid.
Nearly two years into the pandemic it is apparent that it can take and shake the US economy, in ways that are not predictable.
Waiting on the sidelines are those who want to work, unchanged at 5.7 million, but have seemed to adopt a wait and see approach especially with many offices still closed, its employees working from home, (11.1 %) and some restaurants cutting staff, or closing its restaurant dining rooms with “must show” vaccine cards, such as New York and Chicago, rather than find staff to check guests at entry.
We can’t forget that despite earlier gains, the benchmark of Feb. 2020 jobs are still down 3.6 million, and the Federal Reserve has taken a strong look, with its mandate of full employment and 2 percent inflation, although it has signaled that it is willing to “wave” that figure as needed, along with rate hikes to stem inflation.
In a report that was similar to November, before revision, and with an anticipated revision, hope springs eternal.
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