National jobs report comes up short of expectations: just 199,000 jobs added.

As with most pandemic-era economic news, reactions to today’s jobs report are mixed. The Bureau of Labor Statistics reports,

Total nonfarm payroll employment rose by 199,000 in December, and the unemployment rate
declined to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment
continued to trend up in leisure and hospitality, in professional and business services,
in manufacturing, in construction, and in transportation and warehousing.

Nearly 200,000 new jobs in December, as Omicron continued its surge, is far from nothing. Yet, it’s also well short of expectations.

The U.S. economy added just 199,000 jobs in December and the unemployment rate fell to 3.9 percent from 4.2 percent, capping a year of volatility in the labor force that matched the contours of Covid-19 case loads.

The December data, released Friday by the Bureau of Labor Statistics, fell far short of economists’ expectations of 422,000 job gains.

The Wall Street Journal reports that the numbers suggest better times ahead.

“The economy right now is in a good spot and is resilient enough to withstand this Covid surge,” said Julia Pollak, economist at jobs website ZipRecruiter. “We just expect the year to bring a more moderate, sustainable pace of recovery and growth.”

Economists say businesses and workers are gradually learning to live with successive waves of the coronavirus pandemic, limiting economic damage. Still, Omicron threatens to temporarily dent the economy through a different mechanism than previous virus waves, which triggered government restrictions on business and a pullback in consumer demand. Omicron is, by comparison, sending millions of sick workers into quarantine, exacerbating labor shortages. Without enough staffers, restaurants are closing temporarily, airlines are canceling thousands of flights and public-transit systems are suspending services.

The Associated Press applies positive topspin to the report.

U.S. employers added a modest 199,000 jobs last month while the unemployment rate fell sharply, at a time when businesses are struggling to fill jobs with many Americans remaining reluctant to return to the workforce.

At the same time, Friday’s jobs report from the Labor Department showed that the nation’s unemployment rate fell from 4.2% to a healthy 3.9%, evidence that many more people found jobs last month. Indeed, despite the slight hiring gain reported by businesses, 651,000 more people said they were employed in December compared with November.

Wages also rose sharply, a sign that companies are competing fiercely to fill their open jobs. A record-high wave of quitting, as many workers seek better jobs, is also fueling pay raises.

Overall, the report pointed to a still-solid job market.

Calculated Risk sums it up well.

The headline monthly jobs number was below expectations; however, the previous two months were revised up by 141,000 combined.  This was the most jobs added in a single calendar year ever (6.45 million), but not as a percent of the labor force (that happened after WWII).
And the headline unemployment rate decreased to 3.9%.  The household survey indicated a large gain in employment of 651 thousand, and that led to a sharp decrease in the unemployment rate and an increase in the employment-population ratio.
The prime age participation rate and employment-population ratio, are still below pre-pandemic levels, indicating some prime workers are still out of the labor force.   And there are still 3.6 million fewer jobs than prior to the recession.  
In all, a mixed report. And, as we wrote Wednesday, a reminder that the ADP report is of little predictive value, though always interesting.