United States labor market posted positive growth in job market for the twelfth consecutive month. However, the rate of growth was slower as compared to the expectations of many economists.
Lesser New Jobs as Compared to Expectations
The economists were expecting that the December payroll increase will at least be double than that of November. But the U.S. economy managed to add only 199,000 new jobs which was much lower than the expected number of 422,000 jobs. The labor market started to grow momentum during initial period of the third quarter of 2021. However, the growth was hampered quickly. This was primarily due to advent of Delta Variant. The Delta Variant cases slowed down the economic recovery and it also affected the job market . December represents the second consecutive month where the actual added jobs were worse than the expected numbers.
Decrease in Unemployment
On the other hand, the unemployment dropped to 3.9% and economists are considering it a positive sign for economy. The drop in unemployment percentage is higher than the expected figure of 4.2%. These were the lowest numbers of unemployment since the pandemic begun in March 2020. The above stats suggests that businesses are struggling to attract new workers. Factors like virus fears, childcare and large stimulus savings persevere are making it difficult for employers to hire new workers. Although there is a drop in the unemployment percentage, the labor participation rate remained unchanged and stood at 61.9%.
Leisure and Hospitality Are Gaining Slight Momentum
COVID-19 pandemic drastically affected the job market of leisure and hospitality sector. Attracting workers is toughest for employers pertaining to this sector. However, leisure and hospitality sector managed to create 53,000 new jobs which is higher compared to November’s increase of 41,000 jobs. But, they are still much below than October’s number of 211,000 jobs. Sectors like transportation and warehouse and professional and business services witnessed a lower increase in job numbers as compared to previous month. Professional and business services contributed 43,000, while manufacturing added 26,000.
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