US Hiring Cools In December As Economy Adds Just 199,000 New Jobs

By FOX Business
Posted on 01/07/22 | News Source: FOX Business

Economists expected employers to hire 400,000 new workers last month

U.S. job growth faltered in December just as the rapid spread of the new omicron coronavirus variant cast a fresh threat over the economy and its recovery from the pandemic.

The Labor Department said in its monthly payroll report released Friday that payrolls in December rose by 199,000, sharply missing the 400,000 jobs forecast by Refinitiv economists. The unemployment rate, which is calculated based on a separate survey, dropped to 3.9% from 4.2% — the lowest level since the pandemic began.

The labor market had been gaining momentum after a delta-induced slowdown over the summer, but the latest figure represents the second consecutive month of worse-than-expected growth, following upwardly revised gains of 249,000 in November and 648,000 in October. The last time job growth was this slow was in December 2020, when employers cut 306,000 positions. 

The figures suggest that despite high demand for workers, businesses are still struggling to attract new employees as factors like a lack of childcare, virus fears and large stimulus savings persevere.

Rising virus cases pose a new risk to the labor market in 2022: The December report only includes data from the first half of the month, before a stunning rise in cases driven by the highly transmissible omicron variant. The U.S. is now reporting a seven-day moving average of more than 540,000 cases. 

While it's still unclear what the fast-spreading variant will ultimately mean for the health of the economy, its effects on daily life have already been felt: Thousands of flights have been canceled, Broadway shows are shuttering their doors and a growing number of schools have postponed their reopenings.