US Labor Market nears maximum employment despite disappointing December payrolls

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On Friday, US Labor Department’s closely observed employment report had revealed that US non-farm payrolls rose far less than anticipated last month in context of a caustic shortage of workers, though, unemployment rate fell to a 22-month low of 3.9 per cent, suggesting US labor market might already have zeroed in on a maximum employment.

Apart from that, latest monthly non-farm payrolls data from US Labor Department came forth just a day after JOLTS report had unveiled that a record 4.5 million Americans had voluntarily quitted jobs in November, suggesting workers’ confidence on job market alongside a submissive amelioration in a US labor market which would more likely to surmount spiralling pandemic cases even as both factory and services sector activities had tumbled last month.

Aside from that, as the Labor Department’s latest unemployment report had illustrated a sharp downswing in unemployment rate to 3.9 per cent in December compared to a 4.2 per cent in November, leading to analysts’ beliefs that US labor market might be hovering at maximum employment, underscoring a lag in available workers later last year, a senior economist at BMO Capital Markets in Toronto, Sal Guatieri said, “The U.S.

labor market may have lost a little momentum at the end of a stellar year, largely due to the lack of available workers rather than available positions, but it is holding up nicely, at least so far”.

US non-farm payrolls miss expectation by a wider margin

According to survey data from US Labor Department, non-farm payrolls rose by 199,000 positions in December, missing an analysts’ estimate of an increase of 400,000 jobs, though, November data was revised higher to 249,000 positions compared to an initially estimated 210,000.

An all-time high 6.4 million jobs had been created last year, marking off the largest annual gain in employment since the Government had begun to track the data back in 1939.