(Washington Insider Magazine) -In December, the US economy added only 199,000 jobs, and the unemployment rate declined to 3.9 percent from 4.2 percent, ending a year of labour market volatility that mirrored the outlines of Covid-19 case loads.
The Bureau of Labor Statistics’ December statistics, issued on Friday, fell far short of experts’ projections of 422,000 job increases.
In a press conference from the White House on Friday, President Joe Biden lauded the employment report, highlighting record job growth under his presidency and calling the BLS release “a historic day in our national recovery.”
Biden stated, “America is moving up to better jobs with better pay and better benefits,” “They’re not walking away and refusing to work — it’s about taking a step up.”
As the omicron rise is making it difficult for school reopenings, corporate return-to-office plans, huge events, and other benchmarks of economic normalcy, labour market observers predict additional turbulence.
Recent job market statistics has sent out a slew of contradictory messages, while speaking to NBC News, the expert economists said: The BLS report comes two days after private payroll processor ADP said the private sector added 807,000 jobs in December, more than double what economists predicted, and the Labor Department’s Job Openings and Labor Turnover Survey said a record 4.5 million Americans departed their employment in November. However, new weekly unemployment claims issued on Thursday showed an unexpected increase of 7,000, although the total remains below historic norms at 207,000.
Inflationary pressures in the labour market are also a concern for Omicron. “There’s going to be some hesitation on the part of employees coming back to work,” Mark Luschini, chief investment strategist at Janney Montgomery Scott, predicted. “Employers continue to report how difficult it is to hire.”
Short-term but severe labour shortages in critical supply chain areas could push up salaries, resulting in higher pricing for American consumers.
The minutes of the Fed’s December meeting, released on Wednesday, suggested that members of the policymaking Federal Open Market Committee may start hiking rates as early as March, and that the central bank’s balance sheet would be reduced more quickly to combat inflation.
On Wednesday afternoon, as investors estimated the implications of higher borrowing prices, this more hawkish stance caused a sell-off on Wall Street.
“Although interest rates remain unchanged for now, the tapering of monthly bond purchases by the Fed is expected to begin this month,” said Steve Rick, chief economist at CUNA Mutual Group.
