The unemployment rate fell from 4.2% to 3.9% in December as employers added 199,000 jobs, including 3,400 in accounting and bookkeeping services, the U.S. Bureau of Labor Statistics reported Friday.
However, job growth slowed as the COVID-19 pandemic spread through the highly transmissible Omicron variant. Economists had expected a gain of approximately 422,000 jobs for the month. The employment numbers for October and November were revised upward, with the numbers for October going up by 102,000, from 546,000 to 648,000, and the November numbers growing by 39,000, from 210,000 to 249,000. With the growing demand for workers amid a labor shortage, average hourly earnings increased by 19 cents to $31.31. Over the past 12 months, average hourly earnings have gone up 4.7%.
Employment in professional and business services continued to trend upward in December, gaining 43,000 jobs. The main increases in that sector happened in computer systems design and related
services (10,000 jobs), architectural and engineering services (9,000 jobs), and scientific research and development services (6,000 jobs). Accounting and bookkeeping services grew by 3,400 jobs.
“As we continue to conduct research at the firm, nearly 70% of consulting firms effectively are saying they are short staffed,” said Chad Robottom, national practices leader at Embark, a financial advisory consulting firm in Dallas. “Of that 70%, I would say that 20% of those firms reported that they have to turn down work because of those staffing constraints. More than half of consulting firms have also said retention has become a problem in 2021 as compared to 2020, and they’re also experiencing a ton of problems with recruiting people. Effectively, consultant demand continues to grow, but firms unfortunately don’t have enough workers to do all the work. We are experiencing that for sure here in Dallas. My perspective is that the labor shortage is due primarily due to a surge in client demand, as well as competing firms aggressively recruiting and ultimately poaching staff from other firms. Another big driver has been the global pandemic we’re going through.”
Small businesses have also been increasing their hiring and competing for employees over the past month. CBIZ, a Top 100 Firm based in Cleveland, issued its monthly CBIZ Small Business Employment Index on Friday and reported a seasonally adjusted increase of 1.05% in December among the more than 3,700 small businesses it tracks. Hiring growth occurred across various regions of the country, including the West (1.95%), Central (2.88%), Southeast (2.25%) and Northeast (1.80%), reflecting a strong recovery from November’s negative readings for these regions. On an industry basis, the biggest increases were seen in insurance, non-profit, financial services, healthcare, construction, and retail. Education and agriculture experienced hiring declines.
“December is typically a month where we see positive hiring trends due to the holiday season, and this month was especially strong,” said CBIZ executive vice president Philip Noftsinger in a statement. “It’s possible that workforce safety confidence was a growth factor earlier in the month prior to the omicron variant becoming a larger headline later in the month.”