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Monday, January 30, 2023

After Record Year of Job Gains, Hiring in the US Begins to Slow

Last month, hiring in the United States stalled as businesses battled to find workers and dealt with the consequences of the coronavirus.

In December, employers employed just 199,000 individuals, a second month of lower-than-expected hiring.

However, the unemployment rate fell to 3.9 percent, and earnings increased, according to the Labor Department.

The mixed data was gathered before Omicron’s full effect was felt, and it comes after a year of record employment growth.

“For the second month in a row, we’re seeing contradicting signals,” said Mark Hamrick, senior economic analyst at Bankrate.com. “This report appears to represent the current state of affairs before the Omicron variant’s harshest effects struck the economy.”

“To obtain a clearer picture, we’ll have to wait until the next report, which will include the employment market situation in January,” he added.

In 2021, the United States added more over 6.4 million employment, reclaiming much of the ones lost during the pandemic’s peak in 2020.

Despite the fact that overall employment is still 3.6 million fewer than it was before the pandemic – and significantly lower than it would have been if Covid hadn’t hit – several indicators indicate to a healthy economy.

According to the government, a record 4.5 million Americans resigned their employment in November, indicating increased confidence in the labor market, while more than 10 million positions remain available. Unemployment claims have fallen to near 50-year lows.

“On the spot, I could hire three full-time employees and one part-time employee,” said Konstantinos Tsoulos, owner of Brothers Bagels in Brooklyn, New York.

Due to a personnel shortage, he opted to close the business on Mondays in September. He claims that no one has approached him about a job.

“In over 35 years in business, I’ve never seen anything like that,” he remarked.

The employment increases in December were felt across various industries, with leisure and hospitality leading the way. The jobless rate dropped to 3.9 percent from 4.2 percent last year, but average hourly wages increased by 4.7 percent.

The results were dubbed “historic” by US President Joe Biden, who said they represented an economy that had regained its footing owing to a torrent of government expenditure championed by his administration.

Sarah House, a Wells Fargo economist, believes that future growth will be dictated by the availability of workers.

“As reasons for staying out, such as financial buffers, health worries, and childcare challenges, do not unravel all at once,” she added, “the December data emphasized that people are only likely to trickle back into the labor market.”

Inflation in the United States has reached its highest level in almost 40 years as a result of labor shortages.

As a result, the Federal Reserve of the United States has indicated that it intends to begin withdrawing assistance for the economy, maybe as early as March.

However, the introduction of the Omicron version has clouded the economy’s future.

The virus has been blamed for massive worker absenteeism in recent weeks, causing thousands of flights to be canceled, large school districts to close, and hospitals, transportation networks, and other companies to be strained.

Mr. Tsoulos claims that his firm has been able to stay afloat owing to the support of local families. However, he is concerned about the trend to remote working, which has reduced his commuter business and catering orders from workplaces.

“After Labor Day, everyone predicted that the downtown office buildings would open, but nothing occurred. Then they said January, and it’s practically the middle of the month “he stated “Now they’re talking about June,” says the narrator.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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