Employers hired workers at a swift pace in January after
bulking up more than previously reported at the end of last year, reflecting an
economy that is growing solidly in the face of the Omicron wave of Covid-19 and
staffing shortages.
The U.S. economy added 467,000 jobs in January, the Labor
Department said Friday. Payrolls grew by nearly 1.2 million in November and
December, an upward revision to job creation of about 700,000. The report
underscores just how difficult it is for the government and economists to gauge
shifts in the labor market and overall economy during the pandemic.
“The economic fallout from each successive wave of the
pandemic has been smaller and smaller,” said Nick Bunker, economist at jobs
site Indeed, in a note. “This trend, along with strong demand for workers
suggests 2022 could be a year with continued strong gains for the labor
market.”
The unemployment rate ticked up slightly in January to 4%
from 3.9% in December, with more people joining the workforce. Historically low
joblessness is helping spur wage growth. Wages climbed 5.7% in January from a
year earlier, nearly double the average of about 3% before the pandemic hit.
Low unemployment and strong wage growth is expected to keep
the Federal Reserve on track to start lifting interest rates from near zero at
its policy meeting next month. Policy makers see an urgent need to bring down
inflation that recently hit its highest level in nearly four decades.
Workers have more incentive to return to the labor market
than they did a year ago, due to the prospect for a bigger paycheck, a rundown
in pandemic savings and an improving health situation. The labor-force
participation rate, or the share of the population working or seeking a job,
rose to 62.2% last month, the highest level since the pandemic hit in early
2020.
Auto manufacturers shed jobs last month. Most other sectors
fared better; employers in leisure and hospitality, retail and transportation
and warehousing added to payrolls.
H&R Block Inc., a tax-preparation company, is in hiring
mode, as tax season gets under way.
“Everyone has got to get their taxes done,” said Tiffany
Monroe, H&R Block’s chief people and culture officer.
The company has been able to retain tax professionals, such
as certified accountants and tax advisers, from previous years because they
have close relationships with their clients, Ms. Monroe said. But H&R Block
is finding it more challenging to retain and hire entry-level receptionists to
greet clients and take calls across its offices. “We’re definitely going after
the same people that a lot of the other retailers are going after,” said Ms.
Monroe. H&R Block is emphasizing to receptionists that they can advance
into a leadership position or a tax-professional job, she added.
Omicron still affected parts of the job market in January.
The variant sent millions of sick workers into quarantine, exacerbating labor
shortages at restaurants, airlines and public-transit systems. About 3.6
million Americans were employed but absent from work due to illness in January,
up from 1.7 million in December when Omicron caseloads began to grow
exponentially.
Employees worked an average of 34.5 hours a week in January,
down from 34.7 in December. Many were out sick or had to care for ill family
members.
Employee absences are adding to companies’ pandemic-related
challenges, including roiled supply chains.
Being a plant manager is the toughest job at paint supplier
PPG Industries, chief executive Michael McGarry said in a fourth-quarter
earnings call Jan. 21.
“They wake up in the morning, check their phone to see how
many people call off sick, and then they get to work,” he said. “Before they
even have a morning meeting, they’ve had to overcome a number of issues.”
Those include dealing with delays in the receipt of raw
materials and other supply-chain disruptions, such as truckers not picking up
finished products, Mr. McGarry said.
“The labor market is as tight as we have ever seen it,” said
Luke Tilley, chief economist at Wilmington Trust Investment Advisors.
There are roughly 60 unemployed people for every 100 job
openings, meaning just about anyone who wants a job can find one. Still, that
doesn’t mean everyone will have a job. There are about 900,000 fewer Americans
working or looking for a job than before the pandemic struck.
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