A strong jobs report is expected, but it may not reflect Omicron’s effect.
The December data was collected before the latest virus wave took deep hold.
A help-wanted sign at a shopping mall in Gurnee, Ill., in early December. Economists believe that a surge in virus cases in recent weeks has curtailed hiring.Credit…Tannen Maury/EPA, via Shutterstock
Government data on Friday is expected to show that the economic recovery marched steadily forward last month — though appearances may be deceiving.
Economists polled by Bloomberg expect the Labor Department’s December employment report to show a gain of about 440,000 jobs, a healthy number that would signal a rebound from the previous month. In November, employers added only 210,000 jobs, the year’s weakest hiring, though some economists expect those numbers to be revised upward in Friday’s report.
The report is expected to show that unemployment fell by one-tenth of a percentage point in December, to 4.1 percent.
Should those numbers bear out, it would set the tone heading into a crucial midterm election year and would almost certainly be hailed by Democrats as evidence that their economic policies are succeeding.
But Friday’s report will come with an important caveat: The data was collected in mid-December, before the pandemic’s latest wave revealed its strength. Since then, the Omicron variant has ignited a steep rise in coronavirus cases, driving up hospitalizations, keeping people home from work and prompting fresh uncertainty among employers across the country. Economists are bracing for the surge in cases to curtail job growth in January and in the coming months, though it is too soon to say how it will affect the labor market in the longer term.
“There was strong momentum in the labor market heading into this Omicron wave,” said Julia Pollak, the chief economist at ZipRecruiter, an online employment marketplace. But she added that the variant was “likely to cause substantial disruption in January.”
“All we can hope is that disruption is short-lived, because Omicron does tend to be a variant that results in shorter hospitalizations,” she said.
The seesawing employment situation underscores the economy’s continued susceptibility to the pandemic, nearly two years on. Although the labor market has brightened, some industries with face-to-face interactions, notably leisure and hospitality, remain extraordinarily vulnerable to case levels.
Many businesses have postponed return-to-office plans, sometimes indefinitely. Restaurants and theaters have increasingly gone dark amid staffing shortages and renewed fears of infection. Some school districts have returned to remote learning, or are threatening to, leaving many working parents in limbo.
“We’re all sort of at the whims of these variants and surges in cases, and it’s hard to know when they might strike,” said Nick Bunker, director of economic research at the Indeed Hiring Lab. “Any sort of projections or outlook on the pace of gains over the next year or so is still dependent on the virus.”
The Supreme Court will hear oral arguments on Friday over efforts to overturn two major Biden administration policies intended to raise coronavirus vaccination rates: its vaccine-or-testing mandate aimed at large employers and a vaccination requirement for some health care workers.
The hearing comes as the country is facing a surge in coronavirus cases and the White House wrestles with how to manage this phase of the pandemic. It could be the “most important day for public health in a century,” said Lawrence Gostin, a professor of global health law at Georgetown.
The argument boils down to whether the federal government has the authority to impose these mandates, a question the Supreme Court has not yet considered in other challenges:
The Labor Department’s Occupational Safety and Health Administration says it has the power via a 1970 law that allows it to issue emergency rules for workplace safety.
Opponents, which include some states, trade groups and companies, say that the mandates should be left to legislation, not executive action.
The outcome is a tough call, labor lawyers say. The court’s conservative majority may be skeptical of broad assertions of executive power, writes The New York Times’s Adam Liptak. The last time the Supreme Court considered a Biden administration policy addressing the pandemic — a moratorium on evictions — the justices shut it down.
A decision in favor of the mandate would mean that, by Monday, large companies must have policies in place that require employees to be vaccinated or tested weekly. They must be following those policies by Feb. 9.
If the court rules against the government, then that would effectively end the federal mandate, though the administration could pursue the regular rule-making process. This also wouldn’t preclude states from introducing their own vaccine requirements.
The special hearing was called late last month, and the court said it would move quickly (as it did in a recent case over abortion rights in Texas). A ruling could come fast.
In the meantime,many companies have been gearing up for a mandate, if they haven’t already introduced such rules.
Starbucks recently said that U.S. workers would have to be fully vaccinated by Feb. 9 or submit to weekly testing, in compliance with the mandate.
JPMorgan Chase warned employees that “government-issued vaccine mandates may likely make it difficult or impossible for us to continue to employ unvaccinated employees,” and encouraged workers to get vaccinated.
Macy’s requested the vaccination status of its employees, often a prelude to a mandate.
Airlines are at odds with the European Union over rules that require them to use their takeoff and landing slots at airports, forcing them to fly thousands of nearly empty planes — sometimes called “ghost flights” — as travel plummets because of Omicron infections.
In recent weeks, several European carriers, including Lufthansa and Brussels Airlines, have said they need to cancel thousands of fights because they are not booked enough to be profitable. But they are being squeezed by E.U. rules that require them to use their valuable airport slots or risk losing them, potentially to rival carriers.
The rules, which normally require airlines to use at least 80 percent of their allocated slots at airports, were waived in early 2020 as the coronavirus hit the continent. But since then, the bloc has begun reinstating them, and last month the European Commission set the threshold to 50 percent for the winter travel season.
“Now the threshold for maintaining slots is raised again and this means that if we cancel these 3,000 flights, we would lose our slots at multiple airports,” said Maaike Andries, a spokeswoman for Brussels Airlines, said Thursday. “This is something that any airline must avoid of course.”
Pre-assigned takeoff and landing slots are common at Europe’s crowded airports, and are used to allocate space and prevent chaos among different airlines.
In the United States, only three airports maintain slots — Kennedy and La Guardia in New York, and Ronald Reagan in Washington — and the Federal Aviation Administration waived them early on in the pandemic and most recently extended them through March of this year.
In announcing its decision to set the restriction at 50 percent capacity on Dec. 15, Adina Valean, the E.U. commissioner for transport, acknowledged concerns about the Omicron variant, but said the move was aimed at helping airlines return to capacity by the summer.
But as more people canceled trips over the holidays amid the surge in the virus, airlines were left with little choice but to fly near-empty planes or risk losing valuable airport slots.
Carsten Spohr, chief executive of the Lufthansa Group, said his company had to cancel 33,000 flights, roughly 10 percent of those scheduled for the winter season. Others flights took off, but were nowhere near fully booked. Besides Lufthansa, the company owns Eurowings and Austrian, Brussels and Swiss airlines.
“We have to carry out 18,000 additional, unnecessary flights just to secure our starting and landing rights,” Mr. Spohr told the Frankfurter Allgemeine Sonntagszeitung weekly newspaper two weeks ago.
“This is damaging for the climate,” he said, “and is exactly the opposite of what the European Commission hopes to achieve” in its effort to cut greenhouse gas emissions.
Georges Gilkinet, the Belgian minister for transportation, said on Wednesday that he sent a letter to the European Commission asking for a further loosening of the regulation that he called “economic, ecologic and socially nonsense.”
“I asked the Commission to review these unsuitable rules in times of Covid,” Mr. Gilkinet said over Twitter.
This week, the commission said it was standing by its decision to leave slot usage at 50 percent through the winter season, in the interest of balancing the needs of airport operators, passengers and airlines.
That position was supported by a group representing airports.
“The pandemic has hit us all hard. Balancing commercial viability alongside the need to retain essential connectivity and protect against anti-competitive consequences is a delicate task,” said Olivier Jankovec, director of Airports Council International Europe. “We believe that the European Commission has got this right.”
Richard H. Clarida, the departing vice chair of the Federal Reserve, bought and sold shares of a stock investment fund in early 2020 just as the Fed was preparing to swoop in and rescue markets amid the unfolding pandemic.
Mr. Clarida failed to initially disclose all of the financial transactions, Jeanna Smialek reports for The New York Times, citing an amended financial disclosure that shows the trading was more extensive than earlier known.
Mr. Clarida previously came under fire for buying shares on Feb. 27 in an investment fund that holds stocks — one day before the Fed chair, Jerome H. Powell, announced that the central bank stood ready to help the economy as the pandemic set in. The transaction drew an outcry from lawmakers and watchdog groups because it put Mr. Clarida in a position to benefit as the Fed restored market confidence.
The recently amended financial disclosure showed that the vice chair sold that same stock fundon Feb. 24, at a moment when financial markets were plunging amid fears of the virus.
The Fedinitially described the Feb. 27 transaction as a previously planned move by Mr. Clarida away from bonds and into stocks, the type of “rebalancing” investors often do when they want to take on more risk and earn higher returns over time. But the rapid move out of stocks and then back in makes it look less like a planned, long-term financial maneuver and more like a response to market conditions. READ MORE
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