The U.S. labor market recovery continued in January amid a surge in Omicron infections, even though millions of workers stayed home sick or were idled by temporary business closures, causing many to be counted by the government as jobless.
Employers added 467,000 jobs in January, the Labor Department said Friday. That comes even though 3.6 million people weren’t working due to illness, up from 1.7 million in December, when Omicron caseloads began to grow exponentially.
The figures were tallied from a government survey of employers conducted the week ended Jan. 15, the same week that the seven-day average of daily reported Covid-19 cases peaked in the U.S.
“While millions of people may have been out sick at some point in January, they most likely didn’t lose their job or go an entire pay period without pay,” said Betsey Stevenson, an economist at the University of Michigan.
There are some signs in the data showing Omicron’s toll on the workforce: weekly hours worked dropped by 0.2 hours, a toll that was worse for some employees who work in-person, directly with customers: Retail workers lost, on average, an hour of work a week, about 3%, compared with December.
But overall, those declines were more than offset by robust hiring and retention in industries—like retail and warehousing—that typically shed workers after the December holiday season ends. Retailers, for example, added 61,000 jobs, which could be a sign that stores kept temporary workers on their payrolls for longer than usual, according to Glassdoor senior economist Daniel Zhao. Bars and restaurants added 108,000 jobs.
Recorded job gains might have been even higher if not for when the survey was taken, just as Omicron cases peaked and large areas of the country were hit by major winter storms.
“It was the tale of two months: a whole lot of people called out sick the first couple weeks of the month and we saw some really bad winter weather,” said David Gilbertson, vice president at UKG Inc., a payroll software provider. “The impact of Omicron really declined quite a bit in the last two weeks.”
A separate U.S. Census Bureau survey conducted in early January found almost 8.8 million people were out of work because they were sick or caring for someone with symptoms of Covid-19.
About three-quarters of private-sector workers get some form of paid sick leave, according to the Labor Department, a share that has risen slightly since before the pandemic. But many of the workers who benefit from sick leave policies can work from home. More than 40% of service-sector workers, including those who work in customer-facing retail and restaurant positions, have no paid sick leave, a share that has barely changed since 2019.
Companies that hired temporary substitutes for workers out sick may have paid two people for one person’s work, if they provide paid sick leave.
J&J Snack Foods, which makes Icee frozen beverages commonly found at restaurants and convenience stores, has had trouble keeping its service technicians in the field, with many of them contracting the virus and needing substitutes to do their rounds. The company provides paid sick leave.
“Where we really saw the impact [of Omicron] is in the labor shortages and what we needed to do to cover for those labor shortages,” J&J Snack Foods CEO Dan Fachner told analysts on Tuesday.
The number of shifts worked in retail and hospitality declined the most month-over-month in January, according to data from UKG, the payroll software provider. The healthcare sector also saw a steep drop of 4.5% in shifts last month compared with December. That meant hospitals, outpatient clinics and other facilities worked with more limited staff, which curtailed the number of patients they could treat and services they could provide, even after U.S. health officials shortened quarantine times for individuals who test positive for Covid-19 and have no symptoms.
In Washoe County, Nev., which includes Reno, local authorities shut down two Covid-19 testing sites over the weekend of Jan. 15 because of staffing shortages.
“The surge of the Omicron variant is real and it is affecting everyone, including the very healthcare professionals administering those tests, so I ask residents to be patient,” Washoe County Covid-19 Incident Commander Dave Solaro said. Nevada Gov. Steve Sisolak later deployed the National Guard to supplement the beleaguered local testing crews.
Write to Gabriel T. Rubin at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
