US jobless rate sinks to 3.9% as many more people find jobs

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. Consumer spending and business purchases of machinery and equipment likely propelled the economy to a robust annual growth rate of roughly 7% in the final three months of 2021. Americans’ confidence in the economy rose slightly in December, according to the Conference Board, suggesting that spending probably remained healthy through year’s end.