United States | US employment ends 2021 on a mixed note

(Washington) Disappointing job creation in December, unemployment rate falling sharply: The US labor market ended 2021 on a mixed note, reflecting the challenges that await Joe Biden in this election year. This did not prevent the American president from welcoming a “historic day”.

“The Biden economic plan is working and getting America back to work,” he said in a speech from the White House.

The world’s largest economy created just 199,000 jobs in the last month of 2021, far from the 440,000 expected by analysts. And the labor force participation rate remained unchanged at just 61.9%.

These figures are all the more disappointing since the data was collected before the Omicron variant spread across the country like wildfire, causing the closures of theaters, cinemas, restaurants and even schools and imposing a quarantine. to hundreds of thousands of people a day.

The recovery of the labor market is more than ever subject to the vagaries of the pandemic and this report could thus presage darker figures in January when the Omicron effect is taken into account.

But Joe Biden highlighted the unemployment rate which continued to fall at the end of 2021, falling to 3.9% and thus approaching its level before the pandemic (3.5%), against 6.7% in December 2020. Flat, the unemployment rate for black people is 7.1%, and 4.9% for Hispanics.

The Biden administration also highlighted the fact that since December 2020, 6.4 million jobs have been recreated, a record.

But 3.6 million jobs are still missing from the employment peak of February 2020.

For the American president, regaining full employment and controlling the inflationary surge is fundamental in this election year while his economic policy is under fire from criticism from the opposition and even within his Democratic camp.

“The December jobs report is the WORST of Joe Biden’s presidency and just the latest sign that his economic crisis is continuing,” responded Republicans in the House of Representatives.

“Pure stupidity. This is the only explanation for the employment figures under Administrator Biden. […] Joe Biden’s failed socialist agenda is killing the US economy, ”thundered Republican Senator Rick Scott in a tweet.

” Tightrope ”

Some analysts on Friday attributed the dichotomy between weak job creation and a marked drop in the unemployment rate in part to the increase in the number of self-employed workers who have not yet been counted in the statistics.

They also believe that this report should not change the course of the US Central Bank, whose officials seem determined to start interest rate hikes as soon as possible to contain inflation, despite the risk of an economic slowdown.

“In the context of a rapidly deteriorating health situation, the lull in economic activity in the first quarter will force Fed Chairman (Jerome) Powell to walk a tightrope in future meetings,” summed up Gregory Daco, economist at Oxford Economics.

“I am convinced that the Federal Reserve will act to achieve its dual objective of full employment and stable prices and will ensure that price increases do not take root in the long term, with the independence it needs”, commented Joe Biden.

The United States is currently registering more than 550,000 new cases of COVID-19 per day, according to estimates from CDC, the main public health agency. And for the week ended on 1^er January, Omicron accounted for 95% of new cases.

This variant is less fatal than the previous ones, but the wave of infections compromises the return to work.

Rising wages

The year 2021 was marked by a deep imbalance between the plethora of jobs and demand, especially for low wages, as the pandemic also changed the aspirations of American workers.

And this trend is expected to continue at least early in the year.

Likewise the phenomenon of “Great resignation” which has been in full swing since the spring: essentially unskilled employees are resigning en masse to find better employment. In November, they were still 4.5 million, according to data from the statistics office.

For employers, the labor market has thus become a headache.

And to attract candidates, they increased wages and multiplied social benefits: in 2021, the average hourly wage increased by 4.7%, an increase nonetheless insufficient to compensate for the rise in consumer prices.