Job Gains Slow in December

Job gains slowed sharply for the second straight month in December as the Omicron variant began to spread. Nonfarm payrolls increased by 199,000 in December, and the unemployment rate fell to 3.9%.

Construction industry employment (both residential and non-residential) totaled 7.6 million, with 22,000 construction jobs added in December. Residential construction lost 4,100 jobs while non-residential construction employment rose by 27,000 for the month. Residential construction employment exceeds its level in February 2020, while 74% of nonresidential construction jobs lost in March and April have now been recovered.

Total nonfarm payroll employment increased by 199,000 in December, following a gain of 249,000 in November, as reported in the Employment Situation Summary. It is the smallest monthly gain since January 2021. Job gains for October and November were revised upward. The November increase was revised up by 39,000 from +210,000 to +249,000, while the October increase was revised up by 102,000.

Over 6.4 million jobs have been created in the past twelve months of 2021 and monthly employment growth has averaged 537,000 per month. Total nonfarm employment in December 2021 is still 3.6 million lower than its pre-pandemic level in February 2020 level.

Meanwhile, the unemployment rate fell by 0.3 percentage points to 3.9% in December, the lowest rate since the pandemic. It was 10.8 percentage points lower than its recent high of 14.7% in April 2020 and 0.4 percentage points higher than the rate in February 2020. The December decrease in the unemployment rate reflected a decrease in the number of persons unemployed (-483,000) and an increase in the number of persons employed (651,000). The labor force participation rate, the proportion of the population either looking for a job or already with a job, remained unchanged at 61.9% in December. It is the highest level since March 2020.

In December, employments in leisure and hospitality, professional and business services, manufacturing, construction, and transportation and warehousing continued to increase, while employments in retail trade and government declined over the month.

Employment in the overall construction sector rose by 22,000 in December. After seven consecutive monthly increases, residential construction lost 4,100 jobs in December, while nonresidential construction employment rose by 27,000 jobs.

Residential construction employment now stands at 3.1 million in December, broken down as 886,000 builders and 2.2 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 4,783 a month. Over the last 12 months, home builders and remodelers added 74,700 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,080,300 positions.

In December, the unemployment rate for construction workers declined by 1.0 percentage points to 4.7% on a seasonally adjusted basis. It is the lowest rate since February 2020. The unemployment rate for construction workers has been trending lower, after reaching 14.1% in April 2020, due to the housing demand impact of the COVID-19 pandemic.

Discover more from Eye On Housing

Subscribe to get the latest posts to your email.

Leave a Reply