Omicron may be weighing on job growth for now, but The Conference Board’s Employment Trends Index points to strong growth this year.
“The Employment Trends Index increased again in December. And based on the latest readings of the index’s components, job growth is likely to be strong in 2022,” said Gad Levanon, head of The Conference Board Labor Markets Institute. “Nevertheless, in the very short term, job growth may be tepid as the fallout from omicron continues.”
The index rose to a reading of 116.63 in December from 115.64 in November.
In-person services industries will be most affected by omicron through lower consumer spending, leading to less hiring, Levanon said. These industries include restaurants, hotels, personal care, entertainment and passenger transportation.
“In addition, an increasing number of sick or quarantined employees will force businesses to operate at lower capacity and dampen overall economic activity,” he said. “Office environments will need to remain virtual or at least hybrid for the foreseeable future. Labor shortages continue to be severe and will likely remain so going forward.”
Levanon also noted high wage pressures will continue to feed into price inflation.
This month’s Employment Trends Index announcement includes annual revisions of standardization factors.