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U.S. Sees Record Job Growth in 2021 After Millions Lost in 2020 -Breaking

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© Reuters. U.S. Experiences Record Employment Growth 2021, After Millions of Americans Are Lost in 2020

(Bloomberg) — After suffering unprecedented losses the year before due to pandemic, the U.S. has added an astonishing 6.4 million jobs for 2021.

Labor Department data on Friday showed that the unemployment rate dropped to 3.9% in December. The 2.8 percentage point drop in unemployment rate over the year 2021 was the greatest annual gain ever recorded. Economists predicted that the unemployment rate would end at 5.5% in 2021, as early last year.

Following the death of 22 million people in the initial pandemic, there was a rebound in services demand. Consumers who were tired of being ill jumped on the opportunity to get vaccines and increased spending on dining out and travel. And excess savings, fueled in part by the Democrats’ $1.9 trillion stimulus bill in March, bolstered demand for goods. 

This led to increased hiring in industries that were hit hard by the pandemic, such as leisure and hospitality and in rapidly growing areas like transportation and warehouse.

Continue reading: U.S. jobless rate falls as wages rise, adding pressure on Fed

Undoubtedly, the recovery also had its setbacks. Covid-19 concerns, challenges with child-care, high savings, and fears about Covid-19 have all contributed to a low workforce participation that has led to widespread shortages of workers. That’s driven job openings to record highs, and left businesses desperate for employees scrambling to increase headcount.

The payrolls are still 3.6 million lower than pre-pandemic.

Both statistics provide strong talking points heading into the midterms later this year for President Joe Biden, whose approval ratings have sunk below 50% in part due to Americans’ disapproval of his handling of the economy. 

Following the report, Jesse Lee, a representative for the White House’s National Economic Council, touted the progress the labor market made over the course of the year.

The rapid increase in consumer prices is a major concern for many voters. Over a decade of price stability has been broken by a variety of factors, including transportation bottlenecks, labor shortages, and consumer demand stimulus. These factors have led to U.S. inflation levels that are not as high in almost 40 years. The closely monitored consumer price index is due to be published next week. 

©2022 Bloomberg L.P.

 

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