Even though people had jobs in January, omicron's shadow still affected things

While people didn't lose jobs and the overall economy didn't suffer many business shutdowns in January, the unprecedented number of COVID infections did have an effect on the jobs report for that month.

More than 3.6 million Americans were absent from work due to illness in January, more than at any prior point in the pandemic. That's more than 2% of the *entire* workforce. pic.twitter.com/wHz824Afv1

— Ben Casselman (@bencasselman) February 4, 2022

As @talmonsmith notes, temporary layoffs ticked up in January. Suggests there were at least some Omicron-related furloughs, most likely in leisure and hospitality. pic.twitter.com/F6tJYj1jAJ

— Ben Casselman (@bencasselman) February 4, 2022

If you go to the BLS’s “Absences from Work” page, you can see the Omicron effect. Millions of Americans missed at least some work in the middle of January, when the jobs report’s survey was happening.

Absences from work, January 2022
Missed full week
Illness/Medical Reasons 3.62 million (+2.55 million vs Jan 2020)
Childcare Problems 72,000 (+42,000 vs Jan 2020)

So how did that show up in the jobs report?

Depending on the reason they missed work, some people who report that they are temporarily absent from work are not classified as employed. For example, people who missed work due to vacation, parental leave, or bad weather are classified as employed (with a job, but not at work). However, people who were temporarily laid off and expecting recall (and available to return to their job if recalled) are classified among the unemployed on temporary layoff. People who do not have a job, including those who permanently lost their job, are classified as unemployed if they are both available for work and actively looking for employment. (People on temporary layoff do not need to look for work to be considered unemployed.) People who are not employed and do not meet the criteria to be unemployed (for example, they aren’t looking for work or they are not available to work for reasons other than their own temporary illness or they do not expect to be recalled from their layoff) are classified as not in the labor force.

So these people may not have worked, but it’s not because they were laid off or their business was closed, so they are technically considered “employed” and having a job.

And those who had more than 5 hours of their full-time job reduced due to illness or child care reasons are counted in the “part-time for non-economic reasons” stat. This rose by quite a bit in January, but didn’t seem to show up in a large seasonally-adjusted loss (which seems odd).

Missed at least 5 hours of full-time job
Illness/Medical Reasons 4.23 million (+1.86 million vs Jan 2020)
Childcare Problems 196,000 (+111,000 vs Jan 2020)

The only place you’d really see this hit the topline employment numbers is in the “hours worked” stat, and indeed that fell some in January.

The average workweek for all employees on private nonfarm payrolls fell by 0.2 hour to 34.5 hours in January. In manufacturing, the average workweek edged down by 0.1 hour to 40.2 hours, and overtime edged up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.2 hour to 33.9 hours.

Seems small, but that decline in the work week turned a strong 0.7% gain in average hourly wages into a relatively tepid 0.15%, and that could well mesn that real hourly wages going up and real weekly wages going down for January.

If you’re looking at those figures and not thinking “we need more robust child care and sick leave for workers to remove these barriers from economic growth”, then you should be disqualified from being taken seriously on the economy.

So while the predictions from the “experts” about possible job losses in January weren’t close to correct, you can see where that theory may have come from. Where they went wrong (beyond wanting to buy into a Faux News narrative), is that the big jump in absences didn’t get measured as being “out of work”, because those people still had their jobs and their businesses stayed open.

It does mean that we should expect the average work week to be larger in February’s report, assuming omicron infections and hospitalizations continue to fall next week. And if not, then we should be concerned over how total incomes are getting hit by the virus, even if it’s not entirely putting people out of work.