After record-breaking year of job growth, US hiring slows

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Image source, EPA

The US saw slowing in employment last month as many firms had difficulty hiring workers and were still dealing with the effects from coronavirus.

In December 2018, employers hired only 199,000 workers, which was a second month with lower than anticipated gains.

The Labor Department reported that the unemployment rate fell to 3.9%, while wages rose.

This mixed data was collected prior to Omicron’s full force felt. It follows an unprecedented year of job growth.

Mark Hamrick (senior economic analyst, Bankrate.com) stated that “for a second consecutive month, there are conflicting pictures emerging.” This report seems to show the economic state before Omicron’s worst effects on the economy.

To get a more complete picture, we will need to wait to the report that covers January’s employment market.

More than 6.4 Million jobs were added by the US in 2021. This regaining of many of those positions which were taken during the 2020 pandemic.

Although total employment is still about 3.6million lower than pre-pandemic levels – which would be far less if Covid hadn’t struck – there are many indicators that point to a robust economy.

According to the government, record numbers of Americans quit their jobs in November. It is an indication that the market has confidence. In the last 50 years, there has been a drop in jobless claims.

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Konstantinos Tsoulos of Brothers Bagels in Brooklyn said, “I can hire three part-timers and one full-timer on-the-spot.”

He decided in September to shut down the shop Mondays because of a lack of staff. According to him, he had not received any inquiries about jobs.

He said, “I have been in business for almost 35 years. I’ve never seen anything similar.”

December saw job gains across many industries. Leisure and hospitality were the most prominent. While the unemployment rate dropped to 3.9%, it was 4.2% at 4.2%. The average hourly wage rose 4.7% from last year.

US President Joe Biden called these figures “historic”, claiming they reflect an economy recovering from the flooding of government spending that his administration championed.

Sarah House, Wells Fargo’s economist, stated that the future of growth is determined by workers availability.

She said that “December’s Report highlighted the fact workers are unlikely to return into work as there are many reasons why they have stayed out of the market, such financial concerns, healthcare issues, or childcare problems.”

Due to labour shortages, inflation has reached its highest point in nearly 40 years.

America’s central banks responded to this by signalling that they will start cutting support for the economy and potentially raising interest rates in March.

The outlook for the economy has been complicated by the Omicron variation.

It has been attributed to widespread absences of workers in the last weeks. This led to the cancellation of thousands upon thousands of flights and the closing of large school districts. There were also strains on hospitals and transport systems.

According to Mr Tsoulos, his business is still going strong thanks to the support of local families. He is concerned about the transition to remote work, as it has reduced his commuter business and cut into the catering orders that he used receive from office offices.

It was claimed that all the people were claiming downtown office buildings would open soon after Labor Day. But nothing ever happened. “Then, they called January. It’s now almost mid-January,” said he. They now speak of June.

Source: BBC.com

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