Survey: Economists See Unemployment Sinking To Near 50-Year Low In 2022January 6, 2022
By the end of this year, just about all the jobs lost to the coronavirus pandemic will be recovered and joblessness will be close to a 50-year low, according to the nation’s top economists.
Experts polled for Bankrate’s Fourth-Quarter Economic Indicator survey see the unemployment rate dropping to 3.8 percent when 2022 concludes. Joblessness previously sank to a pre-pandemic low of 3.5 percent for the first time since the 1960s. Meanwhile, economists forecast that U.S. employers will add an average of 292,000 new positions each month over the course of this year.
To be sure, that projection reflects a slowdown in job creation, with firms creating about 484,000 new positions each month between December 2020 and November 2021. Yet, if that forecast plays out, the job market will have reached a significant milestone: about 98 percent of its 22.4 million pandemic-era job losses will be restored.
“If the unemployment rate does drop further as many economists expect, the job market will remain tight or tighten further,” says Mark Hamrick, Bankrate senior economic analyst and Washington bureau chief. “That will translate to solid job security and wage growth, effectively money in the bank.”
Forecasts and analysis:
This article is the first in a three-part series analyzing findings from Bankrate’s Fourth-Quarter Economic Indicator poll:
What’s going on with the U.S. labor market
Notably, the majority of respondents in Bankrate’s poll (or 81 percent) see the unemployment rate falling, while every economist sees the labor market growing over the next 12 months. As of November 2021, 4.2 percent of the labor force is jobless.
Economists’ forecasts in Bankrate’s poll were less optimistic than officials on the Federal Reserve, whose December 2021 projections see unemployment falling back to the near half-century low of 3.5 percent by the end of this year.
Some respondents, however, did expect the job market to be that strong in 2022, with five penciling in a 3.5 percent unemployment rate by the end of the year. One economist expected the labor market to eclipse a new record-low unemployment rate of 3.2 percent this year.
Still, economists’ job creation forecasts are slowing, with the 292,000 payrolls forecast down from the third-quarter outlook of 340,000 and second-quarter outlook of 412,000.
That’s partly because COVID continues to be the biggest question mark. About 2.4 million people are still missing from the labor force, according to Labor Department data. That weighs on job creation, as experts say those workers are staying on the sidelines out of fear of catching the virus. The new Omicron coronavirus variant poses even more wrinkles, likely weighing on job growth in the first three months of 2022 especially, economists said.
Those virus-related uncertainties don’t appear to be holding back firms from wanting to hire. About 10.6 million jobs in November were open in the U.S. economy, near an all-time high, suggesting that demand…