The US economy added only 199,000 jobs in December but the unemployment rate fell to 3.9 percent, the government reported Friday, a mixed ending to a year spent recovering from the mass layoffs caused by Covid-19.
Analysts had forecast a much more robust gain in payrolls, but the result fell far short, instead showing other key metrics like labor market participation and racial employment disparities making little improvement last month.
However, the number of unemployed people in the world’s largest economy dropped by 483,000 in the month and by 4.5 million over the course of 2021, closing in on where it was before the Covid-19 pandemic caused mass layoffs, according to the Labor Department report.
The fall in the unemployment rate brought it closer to 3.5 percent, where it was in February 2020 before the pandemic disruptions hit.
Job gains for November and October were revised up, together adding 141,000 more than previously reported, and the data showed the economy gained an average of 537,000 positions a month in 2021.
But as business continue to struggle to fill open positions, the labor force participation rate, a closely watched metric of people either working or looking for jobs, was unchanged last month at 61.9 percent, after spending most of last year idling.
And disparities among racial groups remained, with the jobless rate for Black Americans rising 0.6 points to 7.1 percent, while the rate for other groups fell.
Last year was marked by a sharp price increases that bedeviled policymakers at the Federal Reserve and in President Joe Biden’s administration, and the Labor Department report said average hourly earnings rose 4.7 percent over 2021, close to the rate of inflation.