November jobs report is a bust with only 210,000 jobs added : NPR
Information about November jobs report is a bust with only 210,000 jobs added : NPR
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Hiring slowed dramatically last month as Covid cases rose, even before the arrival of a new and and even more worrisome coronavirus variant, which could put another speed bump on the road to labor market recovery.
Employers added just 210,000 jobs in November, according to a monthly snapshot from the Labor Department. The unemployment rate, which is derived from a separate survey, fell sharply to 4.2%, from 4.6% in October.
Job growth had been gaining momentum, after a slowdown in August and September, when a spike in coronavirus infections tied to the delta variant kept many people on the sidelines. Revised figures show job gains in September and October were stronger than initially reported. But the pace of hiring slowed again in November.
Leisure and hospitality, which has been a bellwether throughout the pandemic, added just 23,000 jobs last month.
“Firms are still struggling to find workers in the sector,” said Nela Richardson, chief economist at the payroll processing firm ADP. “And the sector is also quite vulnerable if there is a resurgence of the pandemic.”
The jobs report is based on surveys conducted about three weeks ago, before the first cases of the omicron variant were detected in South Africa. Health experts don’t yet know how contagious the new strain is or how effective vaccines will be against it. But the delta wave over the summer illustrates how a rise in infections can reduce both demand for workers and the number of people willing to work.
“We saw in a very real way a slowdown in hiring as a result of the delta variant,” Richardson said. “There were fewer people going to restaurants. Fewer people traveling. And that had an impact on hiring. It likely had an impact on fewer people deciding to come back into the labor market.”
So far the U.S. has recovered about 82% of the jobs lost during the pandemic. More than half a million people rejoined the workforce in November. But 2.4 million others who left the workforce when the coronavirus struck have not yet returned. It’s not clear when — or even if — they will.
“We all thought there would be a significant increase in labor supply and it hasn’t happened. So you ask, ‘Why?'” Federal Reserve chairman Jerome Powell told a Senate Committee this week. “There’s tremendous uncertainty around that, but a big part of it is clearly linked to the ongoing pandemic.”
Powell said he doesn’t expect the omicron variant to do anywhere near as much damage to the job market as the first wave of the pandemic, in the spring of 2020. But it could drag out the recovery.
Many employers complain they would like to hire more people but don’t have enough applicants. Powell warned that persistent labor shortages could worsen the supply-chain bottlenecks that have already pushed inflation to its highest level in more than three decades.
Many observers now think the central bank may raise interest rates earlier than expected next year, in an effort to keep a lid on rising prices.
Up until now, the Fed has been willing to tolerate somewhat higher inflation in hopes of fostering full employment. But as the jobs recovery drags on, Powell appears to be rethinking that balancing act.
“To get back to the kind of great labor market we had before the pandemic, we’re going to need a long expansion,” Powell said. “To get that, we’re going to need price stability. And in a sense, the risk of persistent high inflation is also a major risk to getting back to such a labor market.”
Factories, which have seen strong demand, added 31,000 workers in November.
“Manufacturing is powering through the supply-chain and labor supply issues,” Richardson said. “Even though we’re seeing a slowdown in supplier deliveries that could impede production, hiring remains solid.”