The U.S. economy added 245,000 jobs in November as the unemployment rate fell to 6.7 percent, according to data released by the Bureau of Labor Statistics on Friday. Economists have predicted that the economy will get about 440,000 jobs.
Amid a new impetus for coronavirus cases and a new round of downtime, Friday’s data marks the fifth straight month of a slowdown in job growth. This is by far the lowest monthly aggregation since the economy began to stall.
“Today’s report is both a wake-up call and a warning,” said Nick Bunker, director of Really Economic Research. “Cases of coronavirus are on the rise across the country and a number of federal aid programs are coming to an end this month. Labor market development has slowed at the worst possible time. We may be optimistic about spring, but winter could bring another economic turnaround.”
BLS unemployment data is collected on or around the 12th of the month, but another metric underscores how vulnerable the economy is to an “excessive jump” in coronavirus infections around the holidays that could put people back in their homes and shutters.
“This increase could in some cases significantly slow down overall economic activity and therefore the desire of employers,” said Nick Bunker, director of economic research at Indeed.com. “Withdrawal of these households could slow consumption and thus overall economic growth,” he said, “a significant risk as consumer spending feeds about two-thirds of economic activity.
BLS data came two days after ADP payroll and Moody’s Analytics together revealed an incomplete report on workforce growth, with employers adding 307,000 private-sector jobs last month, compared to the expected number of economists interviewed by Dow Jones. 475,000.
“ADP’s employment report was a bit disappointing,” said Julia Pollak, a labor economist at ZipRecruiter.com. “Ideally, we would add 2 million a month and really climb out of this recession.”
Two of the last three weeks of unemployment claims reported an increase, reversing the trend of improvement over the months – but seeing how many people lose their jobs is just part of the equation, said Dan North, chief economist at North America at Euler Hermes.
“It doesn’t tell the other half what the number of employees is. With the increase in closures, you can expect fewer people to be employed. “
The data proves this: According to Glassdoor.com, job vacancies fell 2.5 percent month-on-month and continued to fall more than 10 percent from pre-pandemic levels.
“It’s instructive that this downturn was very broad, suggesting a recurrence of what was seen in the spring, but to a lesser extent,” said Daniel Zhao, chief economist at Glassdoor. “Basically, the number of jobs has been reduced in all major groups except health care,” he said.
As job opportunities are forward-looking metrics, economists are looking forward with some fear to the December job report, which will be released immediately after the new year.
“Finally, the virus is in the driver’s seat. It is the virus that determines the path of healing, ”Zhao said.
North said the deep distortion of normal recording habits, which usually occurs around holidays, makes forecasting difficult. “There were far fewer holiday workers than would be taken into account by seasonal adjustments in general, so this would also reduce the number of jobs in December,” he said.
Although the promise of vaccination has raised investor hopes, public health officials warn that large-scale deployments enough to protect a large part of the population could take months.
“It’s hard to see exactly when healing can really begin,” Pollak said. “Starting vaccination is not enough. We need people to feel completely safe when they gather in large numbers. “