Prospective employers and job seekers interact during a job fair Wednesday, Sept. 22, 2021, in the West Hollywood section of Los Angeles.
Marcio Jose Sanchez/AP Photo
- Despite December’s weak job gains, 2021 as a whole was the strongest in US history.
- The unemployment rate also saw the biggest one-year drop in data going back to 1949.
- The US labor market is on track to recover three times faster than it did from the Great Recession.
The December jobs report might’ve badly missed expectations, but it still capped an unprecedented year for the US labor market.
If 2020 was the year of lockdown, 2021 was the year of reopening. Vaccine approvals early last year allowed the country to strike down economic restrictions and opened the door for Americans to return to normal activity. The Delta and Omicron variants have made the recovery a bumpy one, but the data is in and the results are clear: the US added more jobs in 2021 than in any year in history.
December’s payroll gain of 199,000 brought last year’s gain to 6.4 million new jobs. That’s the biggest one-year gain on record and, on a percentage basis, the best year for job growth since 1978.
The unemployment rate saw a superlative recovery as well. The Friday report showed the benchmark falling more than expected to 3.9%, placing it within spitting distance of the historic lows seen just before the pandemic. That reading is down from 6.7% at the start of the year, making the one-year decline the largest in data going back to 1949.
The recovery is far from complete. Roughly 6.3 million Americans remain jobless. Labor force participation is stuck well below pre-pandemic levels, signaling many people aren’t yet ready to return to the workforce. And the pace of job gains slowed sharply in the last months of last year.
Yet despite much progress still to be made, the pace of the overall recovery remains exceptional, especially considering the depth of the virus’s fallout. The coronavirus’s initial hit powered the biggest decline in US jobs ever and drove the unemployment rate to a record 14.7% in April 2020.
The recovery since has been historic. Stimulus passed under President Donald Trump fueled a swift rebound throughout 2020. Additional aid approved under President Joe Biden, coupled with reopening, kept the country bounding back. If the pace holds, the economy is poised to fully heal in less than a third of the time it took to recover from the Great Recession.
That’s a colossal “if.” The December report only covers hiring through mid-December. Coronavirus cases surged higher soon after as the Omicron variant spread across the country. The January report will be the first to factor in record-high daily case counts and their impact on hiring.
Job openings data published Tuesday also signal hiring difficulties will linger into 2022. Openings remained elevated at 10.6 million in November, according to Job Openings and Labor Turnover Survey, or JOLTS, data. Quits, meanwhile, leaped to a record 4.5 million. While the JOLTS report lags the government’s payrolls release by two months, it suggests businesses continued to struggle with the labor shortage in the fourth quarter.
Still, some bright spots hint at stronger job creation to come. The household survey included in the December report showed the country adding 651,000 jobs last month, more than triple the sum seen in the headline establishment survey. Revisions in the January and February jobs reports could place the December total much higher, as has been seen in several recent months’ payroll counts.
Any such improvement would only add to a stellar year for the economy. The labor market is closing in on a full recovery in 2022, and Americans are set to experience the fastest hiring rebound in history.
Read the original article on Business Insider