WASHINGTON (AP) – On the surface, the November employment report was bleak.
US employers added just 210,000 jobs. It was the lowest monthly gain since December – and not even half what economists expected. This meant hiring slowed even before the new omicron variant of the coronavirus wreaked havoc on the economy.
However, the big picture compiled from Friday’s job postings was not as bleak as the headline suggested. The unemployment rate fell from 4.6% to 4.2%, close to what economists consider full employment. And the Labor Department has revised its estimate of employment growth for September and October for a total of 82,000 jobs.
For months, America’s labor market has been steadily recovering from a short but intense pandemic recession last year. In March and April 2020, employers cut 22 million jobs, a record loss as governments ordered lockdowns and consumers squatted at home to avoid contamination.
Since then, employers have returned nearly 18.5 million jobs. Huge government spending and widespread introduction of vaccines have returned economic activity to pre-pandemic levels.
However, the United States still lacks 3.9 million jobs compared to February 2020. And there are fears that omicron will put pressure on the economy, discouraging consumers from shopping and dining, and forcing factories and ports to temporarily close, thereby exacerbating bottlenecks. during the production and shipment of goods.
Here are five takeaways from the November job posting report:
UNEMPLOYMENT FALLS, AND FOR THE RIGHT REASON
The drop in the unemployment rate was especially encouraging.
The unemployment rate can sometimes fall for the wrong reason – because people become so frustrated that they stop looking for work and are no longer classified as unemployed. (The government does not consider people unemployed unless they are looking for work.)
But the opposite happened last month: many people started looking for work and were hired.
“The taps have opened and hordes of people are back in the workforce,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.
The workforce – the number of Americans who either have a job or are looking for one – grew by 594,000 in November, the sharpest increase since October 2020. The number of people who said they were employed jumped by more than 1.1 million. And the ranks of the unemployed fell by 542 thousand.
Overall, the percentage of Americans working or looking for work – the so-called labor force participation rate – rose to 61.8%, the highest since March 2020.
TWO STUDIES, TWO STORIES
How could employment growth last month be so disappointing when the unemployment picture has improved so much?
Stanley of Amherst Pierpont calls last month’s employment report “one of the most confusing I’ve ever seen.” The mismatch between weak job creation and rising unemployment reflects the way the government compiles its monthly jobs report.
The Department of Labor is conducting two separate studies. One study determines how many jobs employers have added based on their payroll. Another household survey measures the unemployment rate. Two surveys can sometimes tell different stories in the same month, although the discrepancies tend to narrow over time.
In a payroll survey, the government asks mainly large companies and government agencies how many people they have hired this month.
But to determine unemployment, he calls households and asks if the adults living there work. Those who do not have a job but are looking for one are considered unemployed.
Unlike the wage survey, the household survey takes into account agricultural workers, the self-employed, and people working in new companies. He’s also better at finding employment in small businesses.
But the household survey is probably less accurate. The Labor Department is examining a total of 60,000 families. This is far less than the 145,000 private and public employers he interviews for a payroll report.
Stanley said he suspects last month’s wage gains were modest, mainly because employers couldn’t find enough workers to fill their vacancies, which totaled nearly a record 10.4 million in September.
RENTAL DELAYED IN HOTELS AND RESTAURANTS
Leisure and hospitality companies were hit hard by the pandemic last year and hired for most of this year, adding 242,000 jobs a month through October. But last month, their hiring growth slowed sharply to 23,000. This was the smallest number since January, contributing to an overall sluggish growth in the labor market.
Hotels added less than 7,000 jobs, the weakest growth since January. Restaurants and bars, which added over 154,000 jobs a month from this year to October, added just 11,000 jobs in November.
Andrew Hunter, senior US economist at Capital Economics, said he suspected the November hiring cut was partly due to the “winter wave of virus infections that is emerging in the winter.”
ELECTRONIC COMMERCE INCREASES WAREHOUSES, TRANSPORT
The work in warehouses and transport companies is growing rapidly. It increased by almost 50,000 jobs last month. This job growth reflects the shift from traditional retailers to e-commerce – a shift that the pandemic has accelerated.
Jobs in warehouse and transport are already 4% higher than before the pandemic in February 2020. By comparison, retail employment fell more than 20,000 last month and is still 1% lower than before the pandemic.
Warehouses and trucking companies are struggling to meet consumer demand. This trend is a consequence of consumers traveling home, their bank accounts increasing due to government checks for pandemic relief, placing orders, often online, for garden furniture, electronics and other goods.
EMPLOYMENT ANNOUNCEMENT FOR ALL RACES
The unemployment rate across all races fell to a pandemic low last month.
The unemployment rate among black Americans fell from 7.9% to 6.7%, albeit for a combination of good and bad reasons: 97,000 black Americans left the workforce and were therefore no longer considered unemployed. However, overall employment for blacks rose by 169,000.
Unemployment among Hispanics fell from 5.9% to 5.2% as the number of Hispanic workers in employment grew by 502,000, the largest monthly increase since October 2020.
For white workers, the unemployment rate fell from 4% to 3.7%. White employment rose 647,000 last month, the highest since July.