January 2022 jobs report: Strong gains point to resilient economy

A record spike in coronavirus cases kept millions of workers at home in January and disrupted businesses coast to coast. But that could...


A record spike in coronavirus cases kept millions of workers at home in January and disrupted businesses coast to coast. But that couldn’t derail the US labor market recovery.

Employers added 467,000 jobs in January, seasonally adjusted, Labor Department says said friday. The report shattered projections by economists, who had expected the wave of coronavirus cases associated with the Omicron variant to lead to anemic gains or even an outright decline in jobs. Instead, employers continued to hire.

“Clearly, something is different about this push,” said Julia Pollak, chief economist for career site ZipRecruiter. Companies that struggled all fall to recruit workers weren’t about to back down just because cases spiked for a few weeks, she said. Even restaurants and hotels, which cut jobs in previous waves of the pandemic, hired workers last month.

“Employers who have entered into this uphill battle for talent, they are not backing down,” Ms Pollak said. “They stay because they think the wave will be over soon.”

At the White House on Friday, President Biden hailed the “historic” progress of the economy. “America’s work machine is going stronger than ever,” he said.

The January data was collected in the first weeks of the year, when coronavirus cases exceeded 800,000 a day and millions of workers were kept at home by positive tests, suspected exposures or interruptions in child care. More than 3.6 million people said they were absent from work due to illness, more than at any other time during the pandemic. Remote work, which had trended lower as white-collar workers returned to the office, rebounded in January.

Omicron has had an economic impact. The unemployment rate rose slightly to 4% as some companies laid off or laid off employees. Another measure of employment, based on a household survey, actually fell by more than a quarter of a million. And economists have warned that measurement issues and other quirks make the data difficult to interpret.

Yet the main message of the report was one of resilience in the face of a resurgent pandemic. Revised estimates showed stronger job growth in November and December than previously reported, indicating that the economy lost less momentum late in the year than previously thought. And January’s solid gain suggests that Omicron, while disruptive, has done little to shake employers’ underlying confidence in the recovery.

“We’ve seen a two-week wait in the country,” said Becky Frankiewicz, president of ManpowerGroup, a staffing firm. At the height of the recent surge, she said, nearly a third of Manpower’s in-person workers in several cities were absent. Now, she says, “we’re starting to see people getting by.”

White House officials, who had spent days preparing reporters and the public for the possibility of a grim report, were openly relieved on Friday.

“I don’t think I’ve ever been happier to be more wrong,” Jared Bernstein, one of Mr. Biden’s top economic advisers, wrote in an email.

The US economy has recovered more than 19 million of the 22 million jobs lost in the first weeks of the pandemic, and the unemployment rate has fallen much faster than forecasters expected, even after January’s rise.

Yet Mr. Biden has struggled to convince voters that his economic policies are working, in part because of persistent supply chain bottlenecks, labor shortages and rising inflation. higher for decades.

January’s data provided little indication that these issues will be resolved soon. The number of adults participating in the labor force fell last month, suggesting that Omicron may have made hiring difficulties worse. And average hourly wages have continued to rise — good news for workers, but a possible source of concern for Federal Reserve policymakers, who are increasingly concerned that wage gains could become a bigger driver of growth. inflation.

Adrian Washington, a Washington, D.C.-area residential developer, said Omicron has done little to roll back his business, in part because the surge hit Washington over the holidays, when the activity tends to slow down anyway. He posted several vacancies in January and expects to hire more this year.

“Really, I’m – and I think other people are – starting to look past Omicron and say, ‘OK, we’ve gone from struggling to living with Covid,'” he said. -he declares.

But the ripple effects of the pandemic are still affecting Mr. Washington’s business. He proposed increases of 10 to 15% at the start of the year in an effort to retain employees in an increasingly competitive labor market. And tight supply chains force him to order lumber and other key materials months earlier than normal, and at higher prices. This means taking risky bets when rising interest rates make the outlook for the housing market uncertain.

“We are accepting these cost increases now in the hope that we can pass them on, but who knows? ” he said.

Although Omicron appears to have done less damage to the overall economy than many feared, it has been painful for many families and businesses. Six million people said in mid-January that they had worked fewer hours – or none at all – at some point in the previous four weeks because their employer had closed or lost business following the pandemic, the Labor Department said. That was about double the number of people who reported such a disruption a month earlier.

Robert LeBlanc, a New Orleans restaurateur, had six locations before the pandemic — a mix of local restaurants and neighborhood bars, as well as a small hotel — “all of which were profitable, solidly profitable,” he said. he declares. But the economic ravages of Covid-19 led him to close half of his businesses even before the last wave.

“Half our working hours were lost because of Omicron,” he said. “We had to close each of our restaurants for at least two days – some for four or five days – because we had so many people having it at once, and now pretty much everyone on our team has it. got and had to quarantine and take time off.

Sales have fallen to levels not seen since the darkest days of 2020.

This “last Omicron hit” appeared to be “the worst yet,” Mr. LeBlanc said. Not only did the lunch and dinner crowds seem to be thinning out, but the government assistance that had helped the company through past surges was no longer available. “People in the industry are running out of gas,” he said.

Workers have also had to cope with this stage of the pandemic without the expanded unemployment benefits and other aid the government previously offered. That has drawn criticism from some progressives, who argue the Biden administration is effectively declaring victory too soon. The unemployment rate for black workers was 6.9% in January, more than double the rate for whites. Other groups, such as Hispanic workers and people without college degrees, also experience high unemployment rates.

“I still see the administration celebrating the biggest recovery and the fastest recovery in our history,” said Alex Camardelle, director of labor policy at the Joint Center for Political and Economic Studies, a group research focused on issues facing black Americans. “We say, ‘Not so fast.'”

Jose Ramirez, a fast-food worker in San Francisco, woke up on New Year’s Eve with a tickle in his throat. Within days, he had a fever and had tested positive for Covid-19. His three children and his 78-year-old father, who lives with them, have also contracted the virus.

Mr Ramirez, 33, said his first concern was for his children, two of whom are too young to be vaccinated, and his father, whose age puts him at greater risk. But the financial impact was never far from his mind.

Mr. Ramirez, from El Salvador, ended up missing two weeks of work and, without paid sick leave, he earned just $250 in January. He fell behind on the rent.

“I don’t really know what I’m going to do to pay what I owe,” he said through an interpreter. “It was by a miracle of God that my family and I were able to survive. But it was very difficult for me economically.

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Newsrust - US Top News: January 2022 jobs report: Strong gains point to resilient economy
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