The United States created 199,000 new jobs in December, which is disappointing. Rising Omicron cases could make matters worse – Money

United States | Source: Getty Images

CONJONCTURE / / Although unemployment has fallen to its level lowest in nearly two years the United States created 199 000 jobs in December which is worse than expected. This shows that the job market is still struggling to recoup the jobs lost during the pandemic, as the threat of the Omicron variant of the coronavirus looms.

Main facts

According to data released on Friday by the Ministry of Labor, job creations in December were significantly lower than 396 000 new jobs expected by economists, due to a monthly drop of 12 jobs in public administration, against a gain of 199 000 jobs in the private sector Despite this report worse than expected, the rate of unemployment stood at 3.9%, compared to 4.2% e n November, thus reaching its lowest level in over a year, but remaining well above pre-pandemic levels of around 3.5%. The number of unemployed in United States dropped from 483 to 6.3 million, which is much better than the peaks of the pandemic around April 594, but still more than the 5 million in February 2020, the government said.

What we don’t know

How the latest wave of Covid cases will impact recovery of the labor market. The Labor Department conducts a survey around the 01 of each month, which means that it will be “a few more weeks” before Omicron’s economic impact is reflected in the data, wrote Mark Zandi, chief economist at Moody’s Analytics.

The context

In an email, Mark Hamrick, senior economic analyst at Bankrate, said it was “difficult to measure” the economic impact of the Omicron variant at this stadium and cautioned against dismissing its potential, noting that the widespread shortage of workers, fueled in part by lingering concerns about the pandemic, remains a great uncertainty. Economists polled by Bankrate said the variant could weigh on job growth in the first three months of the year, but estimated the unemployment rate would drop to 3.8% in a year. Mark Zandi shared a similar caveat, saying “the risks are increasing” and predicting that the economic recovery “is about to weaken” as Omicron holds back business. In the midst of the latest wave, credit card spending and restaurant reservations have already dropped significantly, while large-scale flight cancellations were another economic concern, notes Mark Zandi.

Article translated from Forbes US – Author: Jonathan Ponciano

Also read : According to a study, the Omicron variant is less likely to cause hospitalization and turn into a serious illness