By Nathalie Voit
Nonfarm payrolls rose by just 199,000 in December while the unemployment rate fell to a new pandemic-era low of 3.9%, the Labor Department said Jan. 7 in its monthly Jobs Report.
Employment gains were led by hiring in the leisure and hospitality industry (+53,000), in professional and business services (+43,000), in manufacturing (+26,000), in construction (+22,000), and in transportation and warehousing (+19,000), the department said.
While all sectors continued to trend upward gains in December, job growth fell substantially short of the Dow Jones estimate of 422,000 for payrolls, CNBC said. For reference, job growth averaged 537,000 per month in 2021.
The total number of unemployed persons nationwide now stands at 6.3 million, down from 10.7 million in December 2020. Year-over-year, the unemployment rate declined by 2.8% as 4.5 million Americans joined the workforce.
The unemployment rate is now nearing pre-pandemic levels, the department said. December’s figure is just 0.4 percentage points shy of the half-century low of 3.5% recorded in February 2020.
Annual job gains totaled 6.45 million in December, easily the highest gain on record since BLS first began publishing its report in 1940. However, the economy is still 3.6 million jobs short, or 2.3%, of its pre-pandemic levels.
In December, average hourly earnings for all workers rose by 19 cents to $31.31. In the twelve months leading through December, average hourly earnings were up by 4.7%.
There were nearly 4 million more job openings than unemployed people through November, as the total employment level was still 2.9 million less than before the pandemic in February 2020.
The labor force participation rate remained unchanged at 61.9% for the month. It was still 1.5 percentage points lower, representing a declining labor force of approximately 2.3 million since the onset of the pandemic.
Meanwhile, 207,000 Americans filed for jobless aid in the week ending Jan. 1, slightly up from a revised 200,000 one week earlier, the Labor Department said Thursday in its latest weekly jobless claims report.
“While hiring has certainly been a challenge, the employment picture has been improving and edging toward what it was pre-pandemic,” said managing director of investment strategy at E*Trade, Mike Loewengart.