Behind Omicron’s Haze, a Booming Jobs Market

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Weak headline numbers hide strong labor market, where it left off after the Omicron boom

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The unemployment rate fell from 4.2% to 3.9%, partly because the households on which the survey is based show faster employment growth than the survey of employers on which jobs data is based. .

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On balance, then, it was a solid report, showing a degree of consolidation in the job market that could prepare the Federal Reserve to raise rates in the first half of this year.

But it covered a period when the increase in COVID cases brought on by the Omicron variant was only starting to pick up. The reference week on which the Labor Department bases its jobs data ended December 18, and the Centers for Disease Control and Prevention covered that seven days.Nearly 924,000 new cases reported, And the unemployment rate in the survey is based on ending December 11, when there were 832,000 cases. In contrast, the past week has reported more than 4 million cases, and next week—the reference period for January’s jobs data—could be even worse.

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The picture of what is happening with the labor market right now is incomplete, but a few things can be speculated.

First, many people who are sick, caring for the sick, or are worried about getting sick, are not coming to work. Multiple hourly workers in that category would not count as employed, which could reduce the number of monthly jobs. More weight on the payroll this month, many people who would otherwise be looking for new employment will probably await the Omicron boom, while many hiring managers will cover for absent workers or absent themselves.

Second, demand for workers remains high, despite Omicron. The job-search site’s statistics actually show that during the last week Job Opportunities Continue to Climb, And the Labor Department’s weekly jobless claims have been scant, suggesting that, even though a surge in Covid cases has hit business, employers are hanging on to their employees.

So one can imagine a January employment report which shows that job growth has slowed significantly, and the number of people participating in the labor market has declined. Taken by itself, this would be a sign that the job market has gone haywire.

But the Omicron surge is a temporary thing and, while the country may be in for many more very difficult weeks, it will dry up like the previous boom. And when it’s over, things will go back to… well, not as normal, but maybe a more environmental like it existed before Omicron and what the last few jobs reports have shown: strong job growth and people slowly are making their way back to the labor market – but not enough to make it easier to find workers.

The December jobs report may be old news, but it’s still news you can use.

Write Justin Lahart at [email protected]

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