Employers add dismal 199,000 jobs in December, unemployment rate hits 3.9%

The latest hiring figures fell below expectations for December.

January 07, 2022, 12:44 PM

Employers added a lackluster 199,000 jobs last month -- less than half of economists' expectations -- and the unemployment rate fell to 3.9%, the Department of Labor said Friday.

Hiring in December was even less than the revised figure for the previous month, when 249,000 jobs were added to the economy in November. The stalled job growth comes as new coronavirus variants continue to sow uncertainty and threaten the post-pandemic economic recovery -- though the data for December was collected in the earlier half of the month, before the full extent of omicron's severity unfolded.

PHOTO: A woman waits for a bus next to a "Now Hiring" sign from the United States Postal Service in Boston, Oct. 30, 2021.
A woman waits for a bus next to a "Now Hiring" sign from the United States Postal Service in Boston, Oct. 30, 2021.
Brian Snyder/Reuters, FILE

The unemployment rate remains heightened compared to the pre-pandemic 3.5% seen in February 2020, indicating the labor market recovery still lags nearly two years into the health crisis. As of last month, employment is up by 18.8 million jobs since the April 2020 low but still down by 3.6 million compared to February 2020.

"Today's jobs report is a disappointing bookend to a historic year in the job market," Daniel Zhao, senior economist at Glassdoor, said in a commentary. "The year ended on a sour note, with job gains slowing even more than in November. New and unpredictable waves of COVID-19 variants threaten to throw the recovery into reverse, showing that we’re still at the mercy of the pandemic."

December's hiring data is also significantly less than 2021's average job growth of 573,000 jobs per month seen during the past year.

President Joe Biden largely focused on the unemployment rate figure falling below 4% during remarks Friday.

"I think it's a historic day for our economic recovery," the president said, touting how far the economy has come from the depths of the pandemic. "Today's national unemployment rate fell below 4%, to 3.9%, the sharpest one-year drop in unemployment in United States history."

The DOL said employment continued to trend upwards in the pandemic-clobbered leisure and hospitality sector (which gained 53,000 jobs last month), but employment in the industry is still down by 1.2 million jobs (or 7.2%) compared to February 2020.

PHOTO: A "Now Hiring" sign is placed on the glass store front of a store in Montebello, Calif., Dec 9, 2021.
A "Now Hiring" sign is placed on the glass store front of a store in Montebello, Calif., Dec 9, 2021.
Frederic J. Brown/AFP via Getty Images, FILE

Employment in professional and business services gained 43,000 jobs last month and notable job gains were also seen in manufacturing (where hiring rose by 26,000 in December).

The trend of teleworking due to the pandemic held steady in December, with a relatively unchanged 11.1% of employees working remotely last month, per the DOL data.

Average hourly earnings, meanwhile, rose by 19 cents last month to $31.31 an hour. Economists have linked the rising wages to struggles major firms have reported in hiring in recent months and the new wave of workplace activism brought on by that trend. Just this week, the Labor Department separately reported that a record 4.5 million workers quit their jobs in November.

"The surprise theme of 2021 was 'labor shortages,'" Zhao said, adding, "The pandemic remains a barrier to employment, and as we keep seeing new variants pop up, we are in unpredictable and ever-changing circumstances. The past year the labor market swung like a pendulum, and today's report highlights that the pandemic is once again in the driver's seat."

Related Topics

ABC News Live

ABC News Live

24/7 coverage of breaking news and live events