U.S. unemployment rate drops to 3.9% as more people find jobs
by Associated Press
Consumer spending and business purchases of machinery and equipment likely propelled the economy to a robust annual growth rate of roughly 7% in the final three months of 2021.
U.S. employers added a modest 199,000 jobs last month while the unemployment rate fell sharply, at a time when businesses are struggling to fill jobs with many Americans remaining reluctant to return to the workforce.
At the same time, Jan. 7’s jobs report from the Labor Department showed that the nation’s unemployment rate fell from 4.2% to a healthy 3.9%, evidence that many more people found jobs last month. Indeed, despite the slight hiring gain reported by businesses, 651,000 more people said they were employed in December compared with November.
Wages also rose sharply, a sign that companies are competing fiercely to fill their open jobs. A record-high wave of quitting, as many workers seek better jobs, is also fueling pay raises.
Overall, the report pointed to a still-solid job market. Consumer spending and business purchases of machinery and equipment likely propelled the economy to a robust annual growth rate of roughly 7% in the final three months of 2021. Americans’ confidence in the economy rose slightly in December, according to the Conference Board, suggesting that spending probably remained healthy through year’s end.
The data for the jobs report reflects the state of the economy in early December, before the spike in COVID infections began to disrupt the economy later last month. Omicron has sickened millions of Americans, forced airlines to cancel thousands of flights, reduced traffic at restaurants and bars, and caused some major school systems to close, potentially keeping some parents at home with children and unable to work.
The aftermath of the pandemic has made the government’s survey of company payrolls more volatile, with one month’s data often followed by a sharply different trend a month or two later. On Jan. 7, for example, November’s job gain of 210,000 was revised up to 249,000, and October’s gain, originally reported at 531,000, was upgraded to a strong 648,000.
The economy has also shown resilience in the face of surging inflation, the prospect of higher loan rates and the spread of the omicron variant. Most businesses report steady demand from their customers despite chronic supply shortages.
Other measures of the economy have mostly reflected a resilient economy. A survey of manufacturing purchasing managers found that factory output grew at a healthy pace in December, if slower than in previous months. Hiring also picked up. Auto dealers report that demand for new cars is still strong, with sales held back by semiconductor chip shortages that have hobbled auto production.