Five notable numbers from Friday’s U.S. jobs report
MAKING MORE MONEY
Average weekly earnings for production and nonsupervisory workers were up 1% from a month earlier in December, the most since March, and were up 5.8% from last December. While that is lower than some of the year-over-year increases seen earlier in 2021, it is line with the trend of above-average pay increases that has developed since the start of the pandemic, which shows worker pay rising on balance by the most in four decades.
PANDEMIC-ERA LOW UNEMPLOYMENT …
The U.S. unemployment rate fell more than economists expected last month and is rapidly closing in on pre-pandemic levels. It currently stands at 3.9%, down from 4.2% in November and below the Federal Reserve’s estimate of its longer-run rate. It’s also only slightly above the 3.5% low it reached before the onset of the pandemic. The subdued rise in the number of Americans in the labor force, even as the pace of job gains has slowed, means it could easily fall further, giving succor to the U.S. central bank’s now clear desire to raise its benchmark overnight interest rate from near zero sooner and at a faster pace than previously expected.
… BUT NOT FOR ALL GROUPS
Black workers were the only racial or ethnic group to see their unemployment rate rise in December when it reached 7.1% – more than double the white unemployment rate of 3.2% – a development U.S. Labor Secretary Marty Walsh called “troublesome.” Employment dropped slightly for Black men and women last month, before the economy began to feel the full effects of the highly infectious Omicron variant of COVID-19, which led to some event cancellations and business closures. Black workers still saw an improvement last year from the end of 2020, when their unemployment rate was 10%. But the increase last month is a reminder of the racial gaps that persist in the labor market.
HIRING NARROWED ACROSS INDUSTRIES
While hiring on balance continues to be broad-based and at a level across industries consistent with a strong job market, it was a bit less so in December. The Labor Department’s “Diffusion Index” – a gauge of just how well distributed hiring activity is across 257 private-sector industries – dropped to its lowest level since January and slid below the average over the last 12 months. While hard-hit industries like leisure and hospitality continued their recovery, hiring activity stalled or dipped in such industries as retail, financial services, healthcare and government.
HOSPITAL EMPLOYMENT SOFTENED AS OMICRON SURGED
Employment at hospitals – the frontline of the COVID-19 public healthcare response – moved sideways throughout 2021 and slipped in December to the lowest level since June. That occurred even as wards filled often to overcapacity around the country with the surge in new cases from Omicron and the more severe and still-circulating Delta variant.