Despite the negative economic consequences of the Omicron variant, it appears to be an excellent time to look for a new job, at least for the time being. However, in the near future, the employment outlook may not appear to be quite as rosy.
The most recent Department of Labor report, which was released on February 1, provides an overview of the job market in December.
Although the number of COVID-19 cases began to rise, the “Great Resignation” continued to rage on, the number of job openings exceeded expectations, and layoffs fell to their lowest levels on record, according to the data.
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According to the Labor Department, there were 10.9 million job openings in December. There were 4.3 million workers who left their jobs, and employers laid off only 1.16 million workers, according to the agency, the lowest number of layoffs ever recorded.
“Despite Omicron, both quits and openings decreased in December, but both remain elevated,” tweeted Daniel Zhao, a senior economist at Glassdoor.
In this way, it serves as a reminder that the ‘Great Resignation’ can be partially explained by a tight labor market, in which more job opportunities for workers translate into a higher turnover.”
Separate Labor Department data show that the unemployment rate in a dozen states fell to record lows in December, while the national unemployment rate fell to 3.9 percent, both of which are record lows.
On January 26, Federal Reserve Chairman Jerome Powell said, “By so many measures, this is a historically tight labor market: record levels of job openings, record levels of quits, and wages rising at the fastest rate they have seen in decades.”
Powell was speaking at the Fed’s monetary policy meeting. In surveys of workers, they report that there are plenty of jobs available. Take a look at company surveys; they all report that workers are in short supply.”
Despite the positive data from December, some economists, analysts, and even the White House are predicting that the Labor Department’s upcoming jobs report on February 4 will not be as encouraging for the labor market.
Employees are quitting in droves.
As of December, 4.3 million people had left their jobs, according to the Labor Department. Economists assert that they are not simply tapping out. They are frequently on the lookout for jobs that are both higher-paying and more flexible.
Following the release of the new Labor Department data, Nick Bunker, a labor-market economist at Indeed, stated that “a growing number of people were leaving their jobs to seek greener pastures due to strong demand for workers resulting in a job switching boom.”
“As a result, wages increased at a rate that the United States labor market had not seen in more than a decade.”
The number of people quitting their jobs reached an all-time high of 4.5 million in November, marking a new record.
While the number of people who quit their jobs in December decreased slightly from the previous month, it remains historically high. Wages for employees in the private sector increased by 5% over the course of a 12-month period ending in December.
Overall, the Great Resignation is still very much alive and well.
The unemployment rate is decreasing.
In addition, the national unemployment rate decreased to 3.9 percent in December, from 4.2 percent the previous month and 6.5 percent the year before. The lowest national unemployment rate ever recorded was 2.5 percent in 1953, according to the Bureau of Labor Statistics.
Omicron warnings
A positive picture is painted by the Labor Department’s data for December in general. Layoffs are at an all-time low. Unemployment is at an all-time low. The number of people quitting is high.
Some economists, including some in the White House, believe that the government’s jobs report, which is due this Friday, will be disappointing for workers.
In order to calculate the unemployment rate and show how many jobs the economy added each month, the Bureau of Labor Statistics only looks at the week that includes the 12th of each month.
Consequently, the current national unemployment rate for December is based on the week that includes December 12, which is prior to the escalation in the number of new cases.
A look at the week ending on January 12 will be included in the upcoming jobs report for January, which is scheduled to be released this Friday. That week coincides with the period during which, according to the Census Bureau, nearly 9 million workers were absent from work due to the coronavirus.
“We just wanted to make sure that people were aware of the fact that [January’s] jobs report may show job losses in large part as a result of workers being absent due to Omicron,” White House Press Secretary Jen Psaki said Monday.
ADP, a private payroll company, released its own monthly report on Wednesday, a day before the government’s figures were released. This increased the likelihood of a disappointing jobs report.
According to ADP’s report, the private sector lost a net of 301,000 jobs in January, a figure that falls far short of economists’ expectations of about 200,000 new jobs.
During a preview of the January jobs report, Zhao of Glassdoor predicts that job losses will be widespread and that the unemployment rate will likely rise.
As he writes in his article, “the January jobs report will almost certainly reflect a downturn in the job market in 2022.”
According to Labor Department data, the unemployment rates in 12 states reached record lows in December, with some rates dropping below 2 percent in some cases.
Here is a list of the states with the lowest unemployment rates on record in December:
- Arkansas (3.1%)
- Georgia (2.6%)
- Idaho (2.4%)
- Indiana (2.7%)
- Kentucky (3.9%)
- Mississippi (4.5%)
- Montana (2.5%)
- Nebraska (1.7%)
- Oklahoma (2.3%)
- Utah (1.9%)
- West Virginia (3.7%)
- Wisconsin (2.8%)
In total, 24 states have unemployment rates that are lower than the national rate of 3.9 percent, which is currently in effect.
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While these unemployment figures indicate a significant improvement from earlier in the pandemic, they do not fully reflect the situation for all people affected. Black workers experienced an increase in their overall unemployment rate in December, which increased from 6.5 percent the previous month.
In a similar vein, many people have dropped out of the workforce entirely as a result of the epidemic. In December 2021, there were over 2.1 million fewer people in the workforce than there were before the pandemic began in 2009.
In the event that people completely leave the labor force and cease looking for work, they are not counted in the unemployment rates listed above, which may result in artificially low official unemployment figures.
