Strong Jobs Report Shows Resilient Economy Despite Covid Wave
A record-setting spike in coronavirus cases wasn’t enough to derail the job market recovery at the beginning of the year.
U.S. employers added 467,000 jobs in January, the Labor Department said on Friday. That showed the resilience of the recovery in the face of a resurgent pandemic. The January data was collected in the first weeks of the year, when coronavirus cases topped 800,000 a day and millions of workers were kept home by positive tests, suspected exposures or child care disruptions. That led many economists — and even the White House — to set expectations for a weak report.
Instead, employers continued to add jobs at nearly the rate they did in December, when payrolls grew by more than half a million. That number was revised up from earlier estimates.
“Clearly something is different about this surge,” said Julia Pollak, chief economist for the career site ZipRecruiter. Job seekers remain optimistic, she said, and companies that have been struggling to recruit workers aren’t pulling back on hiring just because cases shot up for a few weeks. The Labor Department counted 10.9 million job openings at the end of December — just a touch off recent record levels.
“Employers who have been engaged in this dogfight for talent, they’re not standing down,” she said. “They are sticking around because they think the surge will be over soon.”
Omicron’s fingerprints were evident elsewhere in the report. The unemployment rate rose slightly to 4 percent, and the labor force shrank, suggesting the pandemic kept at least some people from looking for work. And more than 3.6 million people reported being absent from work because of illness in January, more than at any prior point in the pandemic.
Economists also cautioned that measurement issues and other quirks made the data difficult to interpret. Indeed, two key measures in the report pointed in different directions last month: Payroll jobs rose, but an alternative measure of employment, based on a survey of households, actually fell by more than a quarter-million.
“This is really good news, especially considering the number of people who say their jobs were disrupted because of Covid,” said Wendy Edelberg, a senior fellow in economic studies at the Brookings Institution. Still, she added, the shockingly large upward revisions for November and December payroll growth that the Bureau of Labor Statistics also announced on Friday is evidence that any given monthly report should be patiently digested as this uniquely situated economy finds a new equilibrium. “There’s a huge amount of churn right now — you don’t want to become too focused on one number.”
Government statisticians try to adjust the monthly figures to account for predictable seasonal trends, such as retail layoffs after the holidays, but the pandemic has disrupted many of those patterns. The Labor Department also incorporates data revisions and methodological updates every January.
Still, economists said that employers’ willingness to keep hiring was a good sign for the economy. If activity could persist during the wave, then when it passes, both consumer spending on in-person services and overall growth should continue to improve “at an accelerated pace, at least for the bulk of this year,” said David Berson, the chief economist at Nationwide Insurance. “After that, the crystal ball gets very hazy.”
The unemployment rate ticked up slightly compared with December as the number of people temporarily laid off increased to 959,000. Still, the report delivered a decent dose of good news for workers, too.
The number of long-term unemployed people — those jobless for 27 weeks or more — declined to 1.7 million, down from four million a year earlier, though still 570,000 higher than in February 2020 just before the pandemic took root.
The count of people employed part time for economic reasons — those who’ve had their hours involuntarily reduced or who would like full-time work but have been unable to find it — dropped to 3.7 million, the lowest level since 2001 after a yearly decline of 2.2 million. That downward trend, economists say, could be a sign that lower-income workers are gaining some semblance of power in an economy often stacked against them.
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