US private companies added 807,000 jobs in December, but economists warned that Omicron may put pressure on the labor market recovery in January.
Private employment data released on Wednesday showed that the highly contagious Omicron variant did not seem to weaken the recovery of the US job market last month. But as the coronavirus rages across the country, Trigger flight cancellationEconomists warned that and forcing workers to take sick leave, Omicron could drag down the jobs created in January.
According to the ADP National Employment Report, the number of private companies employed in December increased by 807,000.
The headline number of the report produced by the ADP Research Institute and Moody’s Analytics—the highest reading since May last year—is almost twice the number predicted by most analysts.
But the data reported by ADP was collected in mid-December, when the spread of Omicron began to heat up.
“This morning’s ADP data is consistent with the strong pace of employment growth in December, indicating that the Omicron wave may have come too late to significantly affect job growth for the month,” said Goldman Sachs economists headed by Jan Hatzius.
Private employment has grown extensively, with an increase of 669,000 employment in the service industry and an increase of 138,000 in the commodity production sector.
In the service industry, customer-oriented leisure and hotel businesses added nearly 1 million jobs last month.
Following the release of the much-watched Department of Labor’s monthly employment report, a more comprehensive snapshot of the US labor market will be released on Friday. After the ADP data was released, economists at Goldman Sachs raised their estimates of non-agricultural employment in December by 50,000 to 1 million jobs.
No matter how strong the jobs created in December, some economists warned that Omicron could have a significant impact on the January data.
“The recent surge in Omicron cases across the country has triggered widespread cancellations and closures as companies that are already understaffed are hit by a wave of employees taking sick leave.” Said Michael Pierce, senior US economist at Capital Macros. “Most absentees will still be paid, so they are considered employed this month. However, the important few who cannot take paid sick leave will not, which may reduce the number of official non-agricultural employment in January by hundreds of thousands .”
Pierce also pointed out that “because the ADP survey treats anyone on the payroll as an employee, but regardless of whether they are paid or not, there may be a big difference between these two employment measures.”
Omicron is not the only headwind facing the recovery of the US labor market. The continuing shortage of workers has also dragged down job creation.
On Tuesday, the Labor Department reported that 10.6 million job openings At the end of November, it was high by historical standards—and Americans were so confident in their job prospects that they continued to quit their jobs in record numbers.