WASHINGTON (AP) – Inflation is rising and new omicron infections are skyrocketing, but American employers are believed to continue hiring in December thanks to strong consumer spending.
One reason for optimism about the employment data that the government will release on Friday morning is that it was probably not much affected by the omicron wave. The hiring figures will reflect the state of the labor market during the first half of December, before the viral cases of omicron soared.
Economists have estimated that employers added 400,000 jobs last month, according to a survey by data provider FactSet. That would mark an increase of 210,000 in November. The unemployment rate is expected to have fallen from 4.2% to 4.1%, a relatively healthy level.
Many employers need to fill jobs because they continue to enjoy constant demand from customers despite chronic supply shortages. Indeed, Friday’s employment report will wrap up one of the best years for American workers in decades, though it was one that followed 2020, the worst year on the job market since records began in 1939, a consequence of the pandemic recession. .
Companies posted a record number of job openings last year and offered much higher wages to try to find and retain workers. Americans responded by quitting their jobs en masse, mainly to get better wages at other employers.
In total, the number of jobs grew more than 4% in 2021 through November, the biggest gain since 1978, after a 6.2% drop in jobs in 2020. Yet the job losses caused by the pandemic were so great that even now, the economy is still nearly 4 million jobs below pre-pandemic levels.
Economists warned that job growth could slow in January and possibly February due to the rise in new omicron infections, which have forced millions of newly infected workers to stay home and self-quarantine, unsettling employers. , from ski resorts to airlines and hospitals.
Alaska Airlines said it will cut 10% of its flights in January due to an “unprecedented” number of employees reporting ill. But because omicron is less virulent than previous COVID-19 variants and few states or localities have moved to limit business operations, economists say they believe its economic impact will be short-lived.
“Ultimately, omicron’s impact will likely be modest and relatively brief,” said Jim O’Sullivan, an economist at TD Securities.
Still, Andrew Hunter, an economist at Capital Economics, a forecasting firm, estimates that up to 5 million people – about 2% of the U.S. workforce – could be stuck at home with COVID for the next week or so. . Workers without sick leave who lose a paycheck are classified by the government as unemployed. Any such trend could slash job earnings in January’s employment report, due out next month.
Omicron is also likely to influence restaurant and bar jobs. The number of Americans willing to eat at restaurants began to decline in late December, according to the reservations website OpenTable. Restaurant traffic was near pre-pandemic levels for much of November, but had fallen nearly 25% below those levels on December 30, according to a weekly average of OpenTable data.
Other measures of the economy have mainly reflected a resilient economy. A survey of manufacturing purchasing managers found that factory output grew at a healthy rate in December, although slower than in previous months. Hiring also sped up. Car dealers report that demand for new cars remains strong, with sales slowed by a shortage of semiconductor chips that has hampered car production.
Last month, Americans’ confidence in the economy actually rose slightly, according to the Conference Board, suggesting that spending likely remained healthy through the end of the year. Thanks to strong consumer spending and increased commercial purchases of machinery and equipment, the economy is estimated to have expanded at an annual rate of up to 7% in the last three months of 2021.