U.S. employment growth misses expectations but unemployment falls to 3.9%

U.S. employment increased less than expected in December amid worker shortages and job gains could remain moderate in the near term as spiraling COVID-19 infections disrupt economic activity, says Reuters.=

The US economy added fewer jobs than expected for the second consecutive month as the nonfarm payrolls rose by only 199K in Dec-21 (Nov-21: 249K), against market expectations of 400K.

This could be attributable by lingering worker shortages driven by concerns of contracting the Covid-19 symptoms and a lack of child care options, which deterred parents from returning to work.

Most of the job growth during the month was registered in leisure & hospitality; professional & business services; manufacturing; construction; and transportation & warehousing sectors.

However, the US jobless rate sustained a downward trend for the sixth consecutive month as it slipped to a new pandemic low of 3.9% (Nov-21: 4.2%), well below market consensus (4.1%).

Given the resurgence in domestic Covid-19 cases amid the emergence of the more transmissible Omicron variant, we anticipate this will continue to affect the pace of recovery in the US job market going forward. – MIDF

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