Government data on Friday is expected to show that the economic recovery advanced steadily last month, although appearances are deceiving.
Economists surveyed by Bloomberg expect the Labor Department’s December employment report to show a gain of about 440,000 jobs, a healthy figure that would indicate a rebound from the previous month. In November, employers added just 210,000 jobs, the weakest hiring of the year, though some economists expect those numbers to be revised up in Friday’s report.
The report is expected to show that unemployment fell one tenth of a percentage point in December to 4.1 percent.
If those numbers are confirmed, it would set the tone for a crucial midterm election year and almost certainly be hailed by Democrats as proof that their economic policies are succeeding.
But Friday’s report will come with an important caveat: The data was collected in mid-December, before the latest wave of the pandemic revealed its strength. Since then, the Omicron variant has caused a sharp increase in coronavirus cases, increasing hospitalizations, keeping people home from work, and creating new uncertainty among employers across the country. Economists are bracing for the increase in cases to curb job growth in January and the coming months, although it is too early to say how it will affect the job market in the long term.
“There was strong momentum in the job market in the face of this Omicron wave,” said Julia Pollak, chief economist at ZipRecruiter, an online job market. But he added that the variant is likely to “cause a substantial disruption in January.”
“All we can hope for is that the interruption is short-lived, because Omicron tends to be a variant that results in shorter hospitalizations,” he said.
The changing employment situation underscores the continued susceptibility of the economy to the pandemic, almost two years later. Although the job market has improved, some industries with face-to-face interactions, especially leisure and hospitality, remain extraordinarily vulnerable at case levels.
Many companies have postponed return-to-office plans, sometimes indefinitely. Restaurants and theaters have grown darker amid staff shortages and renewed fears of infection. Some school districts have returned to remote learning, or are threatening to do so, leaving many working parents in limbo.
“We are all somewhat at the whims of these variants and spikes in cases, and it’s hard to know when they might happen,” said Nick Bunker, director of economic research at Indeed Hiring Lab. “Any kind of projections or perspectives on the Pace of earnings over the next year is still dependent on the virus. “