The U.S. economy continued to falter in December under President Joe Biden's leadership, with monthly job gains falling far below modest estimates set by economic experts.
Total nonfarm payroll employment increased by just 199,000 last month, well below Dow Jones estimates of 422,000, according to a new report from the Bureau of Labor Statistics. The figure was down from November, when 249,000 jobs were added.
Interestingly, unemployment continued its slow downward trajectory during the month, falling to 3.9%, just slightly over its pre-pandemic low.
The disappointing numbers came alongside the emergence of the COVID-19 Omicron variant in the U.S; however, some experts noted that the numbers were likely recorded before the variant spread significantly throughout the country.
“The new year is off to a rocky start,” Nick Bunker, economic research director at job search site Indeed, said, according to CNBC. “These less than stellar numbers were recorded before the omicron variant started to spread significantly in the United States."
"Hopefully, the current wave of the pandemic will lead to limited labor market damage," Bunker continued, adding, "The labor market is still recovering, but a more sustainable comeback is only possible in a post-pandemic environment.”
The economic downturn also appears to be the result of the country's ongoing labor shortage, as businesses that are aggressively seeking to fill vacant posts continue to encounter a lack of willing workers.
The Bureau of Labor Statistics reported earlier this week that there were approximately 10.6 million job vacancies in the U.S. on the last business day of November.
Michael Pearce, senior U.S. economist at Capital Economics, suggested that the numbers “suggest that worker shortages were becoming a bigger restraint on employment growth, even before the Omicron surge in infections, which could knock hundreds of thousands off payrolls in January."
One silver lining to the December jobs report was that average hourly earnings rose more than expected, climbing 0.6% for the month to total 4.7% year over year. The wage growth is good news for American workers who have been hit with historic increases in inflation this year.
Another bit of good news was that job creation, though modest, was highest in the leisure and hospitality sector, adding 53,000 last month. This is a key recovery sector since it was disproportionately damaged during the COVID-19 pandemic.
Other sectors that saw the most growth in December were professional and business services, which added 43,000 jobs, and manufacturing, which added 26,000.