January 1, Unemployment Rate Falls to 3.9%

The national unemployment rate dropped to 3.9% last month, marking a pandemic low.

According to data from the Labor Department, the jobless rate stood at 4.2% in November. In December, 651,000 more people said they were employed.

Pay also increased in December, with average hourly pay up by 4.7% compared to last year. The statistic suggests that employers are competing to fill their open positions amid the so-called Great Resignation.

However, economists have said that the spike in COVID-19 cases amid the omicron surge may slow job growth in January and possibly February. According to AP, “the economy is still about 3.6 million jobs short of its pre-pandemic level.”

Low unemployment and high wage increases could exacerbate inflation as companies raise prices to compensate for higher labor costs.

“Companies are paying up for workers,” said Neil Dutta, an economist at Renaissance Macro Research. “This is consistent with inflation well above 2%, which keeps the pressure on the Fed to raise interest rates.”

Still, President Joe Biden touted the unemployment rate as a “historic” milestone. He claimed the data showed “the sharpest one-year drop in unemployment in United States history and the first time the unemployment rate has been below 4% in the first year of a presidential term in 50 years.”

“Record job creation, record unemployment declines, record increases in the people in the labor force,” Biden continued. “I would argue the Biden economic plan is working and is getting America back to work back on its feet.”

However, as Biden spoke, RNC Chairwoman Ronna McDaniel criticized the latest numbers as his presidency’s “worst jobs report.”

She voiced her criticism on Twitter, saying: “This is the worst jobs report of Biden’s presidency so far. Less than HALF the jobs expected were created. It’s clear: His ‘plan’ is not working!”

Source:

US unemployment sinks to 3.9% as many more people find jobs