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

The U.S. labor market continued to recover in 2021 from the recession caused by the coronavirus disease 2019 pandemic. Both the number of people who were unemployed and the unemployment rate decreased over the year. Although both measures are still above their prepandemic levels, the number of unemployed fell by 4.1 million over the year, to 6.8 million, and the unemployment rate decreased by 2.6 percentage points, averaging 4.2 percent in the fourth quarter of 2021. The employment–population ratio increased by 1.8 percentage points, to 59.2 percent, while the labor force participation rate showed more modest improvement, increasing by 0.3 percentage point during the year, to 61.8 percent in the fourth quarter. The numbers of unemployed on temporary layoff and those unemployed for 27 weeks or longer decreased over the year, but both measures are still above their prepandemic levels.