Percent Change from Previous Quarter in Real GDP – Annualized Rate (Source: Bureau of Economic Analysis) Q1 Q2 Q3
Q4 1.9 4.5 n/a
2019 2020 2021
2.4
3.2
2.8
-5.1
-31.2
33.8
6.3
6.7
2.0
Future economic growth should be aided by the $1.2 trillion infrastructure package passed by Congress in November. The package includes funding for building and repairing roads and bridges, expanding broadband access to rural areas, upgrading public transportation, improving power and water systems, upgrading airports, ports, and waterways, and increasing electric vehicles and charging systems. The Labor Market Overview A collage of factors influenced the labor market in 2021, with some of those factors likely to continue impacting the labor market in 2022. The economic rebound of 2021 prompted a flurry of job openings; however, those job openings were not always filled, and talk of a “labor shortage” resulted. First, an overview of the labor market is presented followed by a discussion of factors affecting the labor market. Employment The chart below shows the roller coaster for U.S. employment from January 2020 through October 2021. Prior to the effects of COVID-19 on the economy, U.S. employment peaked at 152.5 million in February 2020. Two months later in April, employment dropped to 130.2 million. In two months, employment had declined by approximately 22.3 million jobs. 20.7 million jobs were lost in April; the magnitude of the job loss was unprecedented. It was most significant drop in monthly employment since the Bureau of Labor Statistics began tracking monthly changes in employment in 1939. Prior to 2020, the biggest drop in monthly employment was approximately 800,000 jobs in March 2009, almost 20 million less than the number of jobs lost in April 2020. Prior to the financial crisis, nonfarm employment peaked at 138.4 million in January 2008 before bottoming out at 129.7 million in February 2010. During the financial crisis, approximately 8.7 million jobs were lost over two years . During the COVID crisis in 2020, 22.3 million jobs were lost over two months . Since May 2020, employment has consistently recovered. The June 2020 addition of 4.8 million jobs was the largest gain since the Bureau of Labor Statistics began tracking monthly changes in employment in 1939. Prior to 2020, the biggest increase in monthly employment was approximately 540,000 jobs in May 2010, over 4 million less than the number of jobs added in June 2020. In 2021, a resurgence of COVID contributed at least partially to a summer slowdown in employment growth. Between May and July approximately 1 million jobs were added to the U.S. economy. Between July and September, approximately 0.6 million jobs were added. However, employment growth increased strongly in October as 531,000 jobs were added, and employment reached 148.3 million. Since employment growth returned in May 2020, over 18 million jobs have been added back to the economy.
All Employees, nonfarm Payrolls (seasonally adjusted) Source: Bureau of Labor Statistics
2
Center for Business and Economic Insight
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