Behind Omicron’s Haze, a booming job market

The unemployment rate fell from 4.2% to 3.9%, partly because the survey of households it was based on showed faster job growth than the survey of employers. on which the employment data are based.

Then, on balance, it’s a solid report, showing how tightening in the job market could prompt the Federal Reserve to kick start. rate increase in the first half of this year.

But it includes a period when the increase in Covid cases due to Omicron variant just started holding. The reference week on which the Department of Labor bases employment data ends December 18, and during those seven days the Centers for Disease Control and Preventionrecorded about 924,000 new cases. And the survey on the unemployment rate is based on ending on December 11, when there were 832,000 cases. By contrast, there were more than 4 million cases in the past week and next week – the reference period for January employment figures – could be even worse.

The picture of what is happening with the labor market today is not complete, but a few things can be surmised.

First, many people who are sick, caring for the sick, or worried about being sick don’t come to work. Many hourly workers in that category will not be counted as worked, which can reduce the monthly job count. Taking a closer look at payrolls this month, many if not looking for a new job will likely wait for Omicron’s spike, while many hiring managers will cover absentee or absentee workers. face.

Second, the demand for workers remains high despite Omicron. Figures from job search site Indeed show just that last week Job opportunities continue to increase. And weekly jobless claims from the Labor Department remain very low, showing that, even as the surge in Covid cases has dented business, employers are still wearing stick to their employees.

So one might imagine a January jobs report showing that job growth has slowed markedly, and the number of people entering the labor market has dropped. On its own, that would be a signal that the job market has deteriorated.

But the increase in Omicron is a temporary thing and, while the country may have a few more very difficult weeks left, it will wither like past surges. And when it’s over, everything will be back…well, not normal, but maybe like the environment that existed before Omicron and what some previous jobs reports have shown: strong job growth. strong and people are slowly returning to the labor market — but not enough to make finding workers easy.

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

Write letter for Justin Lahart at justin.lahart@wsj.com