Just as President Biden is trying to put his own spin on the economy and inflation, a labor market research group revealed that employment at U.S. companies declined in January by the most since the early days of the pandemic. This is the first negative job report since Biden took office. The culprit seems to be the Omicron variant of the coronavirus, which dealt a blow to the nation’s job market.
According to the ADP Research Institute, the U.S. economy lost over 300,000 j0bs in January. And this is even though the median forecast in a Bloomberg survey of economists anticipated the job rate to rise by 180,000. ADP’s payroll data represent firms employing nearly 26 million workers in the U.S.
The fall in employment because of the multiplication of COVID-19 infections caused many businesses to close or limit their activity, and this led to a new rigidity in the job market. This record number of unstaffed positions along with high employee turnover are impacting our bottom line numbers.
Employment by service providers, the leisure and hospitality industries, fell by 274,00 in January. This is the largest decrease since April of 2020. There were also large declines in the trade, transportation, and utility industry. And there was a decline of 27,000 jobs in both construction and manufacturing.
Companies that have less than 50 employees at the start of 2022 lost 144,000 jobs in a month, and larger businesses lost 98,000 jobs.
“The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact on job growth. The majority of industry sectors experienced job loss, marking the most recent decline since December 2020. Leisure and hospitality saw the largest setback after substantial gains in fourth-quarter 2021, while small businesses were hit hardest by losses, erasing most of the job gains made in December 2021,” Nela Richardson, ADP’s chief economist, said in a statement.
The Biden administration is working fast to figure out how to counter the poor January report on jobs in America. White House officials are going on news programs trying to downplay the significance of the poor showing economically. They are saying that the hurdle in place due to the Omicron variant will soon play out and job growth will once again take place. So, they’re blaming the pandemic…again.
Brian Deese, the National Economic Council director was on MSNBC this week. He was there to warn about the negative report and try to appease concern over economic recovery.
The Washington Examiner gave this report on his appearance, “Brian Deese, the director of the National Economic Council, tried to preempt the news during an appearance on MSNBC. He told viewers that Friday’s numbers might be ‘confusing’ because the jobs report can count people who are out sick and not collecting pay as unemployed when in reality, they still have jobs.’
Deese said that the White House expects low numbers but doesn’t put too much weight on just one month.
The job rate impacting the economy is one thing, but in December, consumer prices rose at the fastest rate since 1982. Consumer prices rose by 7% in December, according to the Labor Department. We haven’t seen anything like that in the last 40 years. And the latest Consumer Price Index data indicates that this is the 3rd consecutive month in which the index rose by more than 6%. This index calculates what the consumer is paying for goods and services.
So we are saddled with economic threats, soaring inflation, and supply chain bottlenecks. That means that each of us is dealing with high prices and limited supply. But the Biden administration wants us to keep our rose-colored glasses in place.