Job Gains Muted by Rise in COVID Infections; U.S. Talent Supply Shrinks
Job gains were muted in December with only 199,000 jobs added, but despite lower-than-expected gains, the U.S. is still making progress toward recovery. In better news, October and November jobs numbers were revised upward by a total of 102,000.
While November and December job gains may have disappointed, it should not be overlooked that 2021 saw record-breaking job gains for the year with 6.2 million jobs added. For context, the only year job gains have topped four million was 1978.
December’s job numbers don’t fully reflect the recent surge in COVID-19 cases caused by the omicron variant – with case counts reaching new highs at the end of December and into January. Due to this timing, January’s numbers are likely to disappoint.
Despite these challenges the economy has added jobs more quickly than many predicted early in the pandemic, and the outlook for 2022 is strong. The main obstacle businesses will face in 2022 is finding and retaining talent. Currently, there are nearly 1.7 job openings for each of the 6.3 million unemployed workers, the unemployment rate is below 4% and a record 4.5 million employees quit their jobs for other opportunities November. And perhaps the biggest factor in the talent shortage is that there are over 2 million fewer workers in the labor force now, compared to February 2020.
Thinking back to early 2021, the economy was in a very similar situation, emerging from a surge in COVID-19 cases. Once again, employees will inevitably miss work due to illness or caregiving responsibilities, stalling progress early in the year. But this year many workers are vaccinated, and businesses are better able to adapt to the virus.
A Look Ahead: Economic Recovery
The economy lost 22.4 million jobs in the early months of the pandemic, and around 3.6 million remain unfilled. While 2022 begins with more challenges than anticipated, the outlook for this year is still strong. At a pace of roughly 298,000 jobs added per month – less than the average monthly gains for 2021 most but more than November and December – all jobs lost to the pandemic would be recovered by the end of 2022.
Top Job Markets in November
While businesses everywhere are facing the same talent crunch, some areas have seen big increases in hiring in recent months. Talent acquisition professionals in these areas will be hard at work!
The top markets – including some of the country’s largest cities – added more than 275,000 jobs combined in November. Dallas has already recovered all jobs lost to the pandemic and continues impressive growth. The other markets on this list have yet to recover, but continued gains keep them on the right track.
- New York-Newark-Jersey City – 98,000
- Dallas-Fort Worth-Arlington – 59,400
- Los Angeles-Long Beach-Anaheim – 52,300
- Houston-The Woodlands-Sugar Land – 33,100
- Miami-Fort Lauderdale-West Palm Beach – 33,100
LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.