America's job recovery hit another hiccup last month.
- Good news: Nearly everybody who wants a job is getting one.
- Bad news: The number of people who want a job isn't rising very fast.
A shortage of workers is holding back job creation and America's recovery from the pandemic.
- Employers added just 199,000 jobs — half as many as economists penciled in. The survey is based on mid-December before Omicron infections soared.
- But the unemployment rate dropped to 3.9%, a fresh pandemic-era low.
"Both sides of today’s report agree the labor market is recovering. The disagreement is just over how fast it is happening," Indeed economist Nick Bunker said in a note.
The monthly jobs report is actually two reports in one, based on separate surveys. Lately, they’ve diverged, with employers reporting slowing job creation but households saying more people are finding work.
- There may be less of a contradiction than it seems. Employers want to create new jobs and are hiring the formerly unemployed, driving down the jobless rate.
- But that isn't coaxing more people to work. The share of adults in the labor force was unchanged in December and remains 1.5 percentage points below pre-pandemic levels.
Employers can't hire people who aren't looking for work, and that's holding back job growth.