After “whisper” estimates for the December jobs report, out last Friday, had plunged well into negative territory, payrolls instead jumped by 467k—well above the official consensus of only 125k, and close to twice the highest Bloomberg estimate. Whisper numbers began to sink upon the release, earlier last week, of a very weak/negative ADP payrolls report; as well as assumptions made about the impact of the omicron COVID variant. In fact, the spread between ADP’s -301k and the Bureau of Labor Statistics’ (BLS) +467k was the third-widest in history.
Record 2021 follows record 2020
Not only were December’s payrolls strong, revisions were sharply higher as well—the prior two months were revised up by a massive 709k. This is the time of year when the BLS also does its longer-term “benchmark revisions.” Based on those, nonfarm payrolls averaged 555k per month in 2021—the highest in history. The average monthly percent increase was 0.4%, the highest since 1978. Perhaps no surprise, that followed the abysmal 2020, when the average monthly job loss was 774k—also a record, but not in a good way.
The separate household survey, from which the unemployment rate is calculated, was also strong at 1.2 million, as shown below.
One Year Look at Payrolls
Omicron hit hours worked, not payrolls
There are a few “rubs” associated with the report; not least being that we are still nearly three million jobs short of pre-pandemic levels, as shown in the first chart below. That said if the 2021 pace of job gains is maintained, the shortfall will be absorbed by the middle of this year. The majority of the shortfall rests with the leisure and hospitality sector; followed by government and education/health services jobs.