New data from the Labor Department reveals that businesses in the United States only added 199,000 new jobs in December 2021 — the lowest recorded since December 2020. Economists thought that jobs added at the end of the year would be much higher than this recorded number. However, multiple factors likely played a part in this drastic drop in hiring.
As a whole, 2021 saw the fastest job creations seen in decades. After a record of 9.4 million jobs was lost when the pandemic first began in 2020, 2021 saw many workers return to the workforce as vaccines allowed many Americans to safely shop and spend at businesses. Government stimulus checks sent to Americans also saw a huge boost to businesses, as consumer demand for goods and services surged throughout the year, making many businesses rush to hire more workers.
2021 saw 6.4 million jobs added — a huge growth in only a year. While the workforce has still not gotten back all of the 9.4 million workers that were laid off, or left, their jobs because of the pandemic, there are multiple signs that suggest more workers will continue to return to the workforce, though slowly.
There are many reasons as to why workers may not be returning to the workforce in the mass waves that economists would have liked. For one, the pandemic is still ongoing, now considered a fluid pandemic that will likely continue to exist — and continue to change — because of the ongoing mutations and variants. As new variants emerge, especially new contagious variants, this has made many people wary of working in careers where they could be at risk of becoming infected with the virus.
Many Americans also decided to change their careers, become self-employed, or retire because of the pandemic. This has also impacted the number of new jobs created each month. Record numbers of people voluntarily leaving their jobs have been incredibly high for the last few months — and this may continue on, especially as the pandemic lingers and causes many to rethink their careers.
Hiring has likely slowed because businesses are unable to find the number of workers needed to help their business run. Because workers are in high demand, this has allowed many people to voluntarily quit their jobs and change careers, as they know that they will likely find a new job easier than expected. This means that the slow down in hiring doesn’t mean that there are no jobs to fill — it means that businesses are having a hard time finding the accurate people to fill these jobs.
Childcare worries also continue to affect many Americans in the country. Many people possibly haven’t returned to work because they cannot find accurate childcare. Childcare jobs, meanwhile, continue to suffer with hiring slowing down specifically in this industry each month.
While this new data was disheartening for many economists, the labor market as a whole is still working towards recovery. Many positive factors have made analysts optimistic for the future. For example, the unemployment rate dropped to about 3.9% — the lowest recorded since the COVID-19 pandemic first began in the United States.