Monday, January 10, 2022

More evidence that a March rate hike is appropriate.”

Darwit Kebede

WASHINGTON — The U.S. economy added 199,000 jobs in December, according to new data from the Labor Department. While that was the fewest jobs added in any month of 2021, one credit union economist sees signs a “strong recovery” continues.

The 199,000 new jobs came in well below what many economists had forecast, with most expecting it would be double that number.

Nevertheless, despite the weaker than anticipated numbers, 2021 will still go down as a year of record-breaking jobs growth, with the country adding 6.4 million jobs during the year, the most since records started in 1939.

The unemployment rate fell to 3.9% in December, marking a new pandemic-era low.

“The labor market added fewer jobs than expected in December,” said CUNA Senior Economist Dawit Kebede. “However, the unemployment rate continued to decline, falling below 4%, which indicates a strong recovery. Overall, the economy added on average 537,000 jobs per month in 2021.
“The employment data was collected before the Omicron variant blanketed the nation, turning entire areas into hot spots for community spread. Hence, the variant -- although less severe than Delta -- could temporarily derail progress in subsequent months.
“A 3.9% unemployment rate is good news for the Federal Reserve who is on track to end its stimulus by March in order to fight inflation,” Kebede added.

Added NAFCU Chief Economist and VP Curt Long, “The December jobs report was another mixed bag, as the establishment survey showed a disappointing gain of just 199,000 jobs, but the household survey showed another large decline in the unemployment rate. Even though the establishment survey failed to hit expectations for headline job growth, it still indicated a strong advance in hourly wages. Given the FOMC’s latest hawkish turn, the committee is likely to receive this report as more evidence that a March rate hike is appropriate.” 


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