HomeNewsDecember Jobs Report: Unemployment Rate Falls to 3.9%

December Jobs Report: Unemployment Rate Falls to 3.9%

by Amy Myers
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(Photo by Win McNamee/Getty Images)

The U.S. Labor Department has released its job report findings for the month of December. And thankfully, the unemployment rate has dropped to 3.9 percent. This is 0.2 percent lower than the reported rate in November, and 0.1 percent lower than experts estimated for the end of 2021.

On Friday, January 7, the department released the report, and the main metrics pointed towards some good news for the workforce in terms of employment. However, we still have not reached pre-pandemic numbers.

In February 2020, the U.S. hit a 50-year low in unemployment rates at just 3.5 percent. Then in April 2020, this number jumped to 14.7 percent. Since then, the rate has steadily decreased, month by month. The latest findings for December seem to support the still-decreasing trend as the Labor Department compiles data for 2022.

Another bit of good news from the job report involves workforce participation rates. The Bureau of Labor Statistics defines the labor force participation rate as “the percentage of the civilian noninstitutional population 16 years and older that is working or actively looking for work.”

Based on the Labor Department’s findings, the workforce participation rates increased from 61.6 percent in October to 61.9 percent in November and December. This is a gradual improvement from the record-low rate in April 2020 of 60.2 percent. However, we still have a ways to go before we begin seeing pre-pandemic numbers of 63.2 percent in August 2019. As it stands, the workforce still has 2 million fewer civilians employed or looking for employment than before the start of the pandemic.

Omicron Variant Might Not Yet Have Effect on Unemployment Rate

According to Yahoo! News, none of the new statistics are the result of the COVID-19 Omicron variant. By December 22, there were 168,409 daily cases of COVID-19 in which the Omicron variant was dominant. This is an even higher count than the Delta variant’s peak at 164,418 daily cases, per The New York Times.

Despite the sudden influx in cases, the virus’ effect on the workforce and unemployment rates won’t be apparent until at least January 2022. This is because the Labor Department collects the job report data during the week, including the 12th of the month. Likely, this was still too early to see any consequences from the uptick in cases.

Another major component that might not be evident in the Labor Department’s latest findings is the number of Americans that quit their jobs in November 2021. During this month, 4.5 million workers resigned from their positions, causing strain on employers to find replacements. In the coming months and future job reports, we will see how this may hinder the job market competition, unemployment rates and payroll statistics.

Outsider.com