US employers added 467,000 jobs in January despite Omicron wave

Friday’s report from the Labor Department also showed the unemployment rate rose from 3.9 percent to 4 percent. The job benefits were also revised down heavily in December.

The strong hiring gain, which was unexpected, demonstrates the eagerness of many employers to keep hiring, even as the pandemic continues to hold its grip on the economy.

Businesses appear to have viewed the Omicron wave as the most temporary impact on the economy and remain confident about long-term growth.

If the forecast is accurate, January will mark the lowest monthly job gain in nearly a year.

Some economists fear the government’s report will reveal that the economy actually lost jobs last month, mostly because the Omicron infection forced so many workers to get sick and stay at home. In some cases, the government will count those absent workers as losing jobs.

The COVID-19 surge also caused many workers to likely suspend their job searches, exacerbate a labor shortage that has put many people on the edge of the workforce and prompting employers to try to pull them back. Leading to increase in salary. And with so many employees sick, some companies suspend their hiring, even as employers have millions of jobs in total they want to fill.

Reported Omicron infections rose above 800,000 a day during the second week of January – the exact same period the government measured employment for the month.

The dismal jobs data is a reminder that nearly two years after it began, the pandemic has kept a firm grip on the economy.

Still, most economists expect a relatively rapid rebound in recruitment as soon as this month.

Nationally, reported omicron infections are staggering. And the overall outlook for the job market remains bright, with many businesses still desperate to get hired: The number of job openings reached nearly 11 million at the end of December, well below the record set in July. .

The pace of layoffs and the unemployment rate are both close to pre-pandemic lows.

Last month, a Census Bureau survey found that nearly 8.8 million people didn’t work in early January because they were either sick with COVID-19 or had to care for someone who was. This was more than triple the number in early December. Most of those workers are likely to benefit from employer-paid sick leave, and their stay at home does not affect job numbers.

But about one-fifth of workers – especially low-wage service workers who are most likely to contract the virus – have no paid leave. If they missed a full pay period for illness, their job would be counted as lost for the month, even though they were still employed. This will reduce the number of government jobs for January.

The Department of Labor uses a different method to calculate the monthly unemployment rate.

With this method, even workers who became home sick during the previous month would count as employed if they had a job to return.

The difference in the way the numbers are calculated is part of the reason why economists expecting job losses for January also expect the unemployment rate to be at 3.9 percent, or perhaps even a slight drop.

The US gained more jobs last year, adjusted for workforce size, than any year since 1978 after any hiring slowdown or job loss. The unemployment rate fell nearly 3 percent – from 6.7 percent to 3.9 percent – the sharpest annual drop on record. Much of that improvement represented a rebound from record job losses in 2020 driven by the pandemic.

But last year was the highest inflation rate in four decades with the economy growing strong and hiring, driven by sharper consumer spending on furniture, electronics, appliances and other goods. Stranded supply chains limited the availability of many items, driving up prices. High inflation has wiped out the wage benefits of many Americans.

The Omicron transition is slowing the economy in the January-March quarter, especially compared to the rapid expansion in the last three months of 2021, when it strengthened at an annualized rate of 6.9 per cent. Some analysts have predicted that the growth rate will weaken to as low as 1 per cent in the first three months of this year.

One reason for the slowdown: Americans cut their spending in January as the spread of the coronavirus discouraged some people from eating out, traveling and going to movies and other entertainment venues.

Yet as the omicron fades, there are signs that consumers are ready to spend again. Auto sales jumped in January after several months of decline. Car manufacturers have been able to gradually increase production. And Americans’ incomes grew at a solid pace last month, providing fuel for future spending.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.