The Jobs Report – December 2021

Highlight

In December, the economy added 199K jobs, below the consensus estimate of 450K while the prior two months were revised up by 141K. For the year, job growth averaged 537K per month.

What you need to know:

1. The unemployment rate fell from 4.2% to 3.9%. In February 2020, before the pandemic, the unemployment rate was 3.5%.
2. Job growth was widespread through the economy with retail trade and government the only sectors that lost jobs in December.
3. Leisure & Hospitality added 53K jobs, an increase from November’s 41K gain. With the increasing cases of the Omicron variant, we could see some Q1 2022 weakness in these industries.
4. Construction and manufacturing had solid gains in December, but both sectors saw the rate of increase slow from the November report.
5. The economy continues to add jobs, but this report is probably less robust than policymakers would like. The rising Omicron case count could put the positive momentum in job creation on hold for the first part of 2022.
6. The Fed appears committed to a more restrictive monetary policy in 2022. With inflation still worrisome, this report, while weaker than expected, probably will not change their policy view.