Industry Insights

JobGet’s December Unemployment Update

By: Holly Monti
Jan 14, 2022 • 5 min read

JobGet’s December Unemployment Update

The Bureau of Labor Statistics’ December job market report once again contains a mix of good and disappointing news. While the unemployment rate fell below 4% for the first time during the pandemic and is close to the 50-year low rate of 3.5% in February 2020, job gains were far less than expected. Data collected for this report are from the first half of December before the COVID-19 Omicron variant began spreading rapidly across the country. January and February numbers will reveal the impact of the latest COVID surge on the job market and recovery.

JobGet Unemployment Report Dec v2-converted (1)


The economy added just 199,000 jobs in December, far fewer than the 400,000+ that were predicted. However, job gains for October and November were revised upwards by a combined 141,000 jobs.  In total, the economy added a record 6.4 million jobs in 2021, or an average of 537,000 per month. Slowed job growth in recent months likely reflects the tight labor market, and that a lack of supply of workers, and not demand for workers, can explain much of the slowdown in hiring. It is also likely that December’s job gains will be revised upwards in future months.

Though job gains were weak, the unemployment rate fell once again, this time to 3.9%, a new pandemic low. The unemployment rate data is from the BLS’s household survey while the jobs numbers are from the establishment survey. Typically, the two surveys paint a similar picture, but results have diverged in recent months as the household survey has shown much more optimistic numbers.

Over one-quarter of job gains occurred in the Leisure and Hospitality sector, which added 53,000 jobs for the month. Hiring in Professional and Business Services accounted for 22% of total job growth, and jobs added in Manufacturing made up another 13%. Average wages continued to rise and at the fastest clip since April. Rising wages reflect strong competition for workers among employers.

The job market remains very tight. As businesses continue to report difficulty finding workers, the Great Resignation is still in full swing. A record 4.5 million workers, or 3% of the workforce, quit their jobs in November.  At the same time, job openings remain very high at 10.6 million.

Unemployment Breakdown

The total number of unemployed individuals fell from 6.9 million in November to 6.3 million in December, while the number of people on temporary layoffs and permanent job losers also decreased. The number of long-term unemployed fell by 185,000. Now at 2 million, this number currently stands at half of what it was a year ago but is 887,000 higher than in February 2020. Median unemployment duration ticked down to 12.9 weeks from 13.4 weeks, while the share of long-term unemployed workers dropped slightly, from 32.5% in November to 31.7% in December.

Overall, the unemployment rate declined from 4.2% to 3.9%. When broken down by demographic group, the unemployment rates for Whites, Asians, and Hispanics all declined in December. However, the unemployment rate for Blacks increased from 6.5% in November to 7.1% in December. Both adult men’s and women’s unemployment rates dropped, both down to 3.6% from 3.9% in November, while the jobless rate for teens remained unchanged at 10.9%.

Unemployment rates are lower for every occupation category when compared to a year ago. Among service, sales & office, natural resources, construction and maintenance, and transportation and material moving occupations, unemployment rates are 2.2 to 5.6 percentage points lower than rates from December 2020. Jobless rate for sales & office and transportation and material moving occupations fell from November to December. As the unemployment rate for services remained unchanged for the month, the unemployment rate for construction and maintenance increased from 5% in November to 5.8% for December.

Industry and Earnings

After a lackluster hiring month in November, Leisure and Hospitality picked up some steam in December, adding 53,000 jobs, accounting for 27% of total job gains. The majority of these job gains (81%) occurred in restaurants and bars. Employment in Professional and Business Services, Manufacturing, and Construction continued to trend upward as the industries added a collective 91,000 jobs. Hiring in Leisure and Hospitality will likely be impacted by the latest COVID-19 surge, but data for December was collected too early to tell.

Average hourly wages increased by 0.61% or 4.7% on a year-over-year basis. This wage growth is stronger than in recent months and higher than expected. Information and Wholesale Trade saw the largest wage gains for the month, with an increase in average hourly wages of $0.70 and $0.33, respectively.

Non-manager wages increased by 0.68% for the month; average earnings for non-managers are now nearly $27/hour, up by 15% from January 2019. Some industries, including Leisure and Hospitality and Retail, have seen even stronger non-manager wage growth over the last 3 years. These large wage increases reflect the current labor shortage and strong competition for workers among employers.

Employment Levels and Labor Force Participation

While December added just 199,000 jobs, the labor force, which includes either people who have a job or are looking for one, increased by 168,000. Although employment is far below pre-pandemic levels, the labor force is gradually increasing. And the low unemployment rate indicates a tight labor market, in which the biggest impediment to hiring is a shortage of workers.

The labor force participation rate remains unchanged from November at 61.9% and is 1.5 percentage points lower than pre-pandemic levels. Many aging workers retired early due to the pandemic, which has depressed the labor force participation rate. However, the prime-age employment rate, or the share of workers aged 25 to 54 with a job, increased again to 79% and is on track to return to its pre-pandemic level in a few months.

Record Quits

The Great Resignation seems to be far from over. The U.S. set a new record in November for the number of quits—4.5 million. That is, 3% of workers voluntarily left their jobs. At the same time, job openings remain very high at 10.6 million. This means there are nearly 1.7 job openings per every unemployed worker.

The low unemployment rate, widespread reports of labor shortages, and rising wages all point to a very tight labor market in which workers have the upper hand. They are leaving their jobs in search of better wages, benefits, and working conditions.

Key Takeaways

Job gains in December numbered just 199,000, once again far below expectations. However, the unemployment rate hit a new pandemic low, dropping under 4% for the first time since early 2020. While total employment is still much less than pre-pandemic levels, slowed job growth likely reflects a tight labor market and shortage of workers.

December’s job market data was collected before the COVID-19 Omicron variant started spreading rapidly in the U.S. Data for the coming months will reveal the impact of the latest COVID surge on the job market.

JobGet is proud to help hopeful job seekers land great positions on our platform. It is important that both candidates and employers have their needs met as we continue to navigate the pandemic job market.

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