U.S. labor market shows improvement in 2021, but the COVID-19 pandemic continues to weigh on the economy

Abstract

In summary, major employment and unemployment measures from the CPS continued to show improvement in 2021. The national unemployment rate trended down in each quarter of 2021, reaching 4.2 percent by the end of the year. The jobless rate decreased for men and women, as well as for all major race and ethnicity groups. The unemployment rate decreased among all occupations, with the sharpest decline in service occupations. The employment-population ratio increased by 1.8 percentage points, to 59.2 percent in the fourth quarter of 2021, while the labor force participation rate improved at a much slower pace, rising by 0.3 percentage point to reach 61.8 percent by the end of the year. The level of self-employment in nonagricultural industries increased throughout 2021. The percentage of people who teleworked because of the COVID-19 pandemic declined throughout 2021 and ended the year at 11.1 percent.