After receiving December’s report from the Labor Department signaling that hires have slowed down, analysts have begun to forecast how they expect the labor market to be in 2022 — and it’s not negative. While analysts may have ended the year of 2021 on a bit of a sour note as the result of the less than stellar job reports from November and December, many economists believe that 2022 will see the United States labor market reaching full employment, and therefore fully recovering from the COVID-19 pandemic.
2021 had a record year for the labor market. After many people were laid off in 2020 because of the COVID-19 pandemic, many economists began the year wondering just how long people would be forced to remain unemployed. While the first few months of the years appeared as if these difficulties would continue, the rollout of vaccines changed things drastically.
As more Americans became fully vaccinated, consumer demand for goods and services surged very quickly. Businesses rushed to meet this large consumer demand — and had to hire a mass amount of workers in a short time frame. This caused hiring and business activity to surge as a result.
However, hiring didn’t surge with each month. Throughout 2021 as a whole, hiring was quite uneven from month to month. For example, 1.09 million jobs were added in July, while only 199,000 jobs were added in December. On average, however, about 537,000 jobs were added each month, based on the yearly total.
Therefore, hiring was definitely uneven. Economists thought that most of those who were laid off in 2020 or early 2021 would quickly return to new jobs in mass waves once people started becoming fully vaccinated. This didn’t necessarily happen as quickly as economists had anticipated, and in many ways that mass wave of hiring still hasn’t occurred. Instead, people are returning to work slowly, with each new month.
While some analysts may have been anticipating a much larger jobs report for December, this slow down in hiring doesn’t necessarily mean that hiring has officially slowed down. For many economists, they expect hiring to continue and for 2022 to end in full employment for the labor market. This could very well happen even if the jobs reports continue to be lower than expected.
Weekly jobless claims — those who file for unemployment — continue to go down with each new week as employers keep from laying off their employees, as they’re worried they won’t easily find another worker to take their place. The labor market is tightening. Many people are also voluntarily leaving their jobs, as they feel comfortable that they will find another soon enough.
In January, the unemployment rate was at 6.3%. By December, the unemployment rate had fallen to 3.9%. Many analysts consider this rate to basically be full employment, though others still would like to see unemployment go down. Currently, the country has recovered about 18.8 million jobs of the 22.4 million jobs that were lost throughout the pandemic. Now, economists believe that the country will only continue its progress forward.