WASHINGTON (AP) – US employers slowed their hiring rate in November, adding 210,000 jobs, the lowest in nearly a year.
Friday’s Labor Department report also showed that the unemployment rate fell sharply to 4.2% from 4.6%. This is a historically low level, although it still exceeds the pre-pandemic unemployment rate of 3.5%.
Overall, November jobs data point to an economic recovery that looks robust, albeit threatened by a surge in inflation, labor and material shortages, and the potential impact of the omicron variant of the coronavirus.
Little is definitively known about this option, and massive plant shutdowns are considered unlikely. However, omicron could discourage some Americans from traveling, shopping and dining in the coming months and potentially slowing the economy.
For now, however, Americans are spending freely, and the economy is projected to grow at 7% per annum in the last three months of the year, a big rebound from the 2.1% growth rate in the previous quarter when delta was difficult. height.
But under the headings of employment and unemployment figures, there is a potentially even bigger question: Are more and more people who have lost their jobs due to a pandemic recession finally leaving the scene to look for work again? Many more job seekers are needed to help companies fill their open jobs and keep the economy growing.
This is also an important issue for the Federal Reserve. If the proportion of people who either have a job or are looking for it does not increase much, this would mean that the Fed is moving closer to its goal of maximum employment.
With inflation peaking in three decades and well above the Fed’s annual 2% target, fulfilling its hiring mandate will increase pressure on Chairman Jerome Powell to raise interest rates sooner rather than later. This would make loans more expensive for many individuals and businesses.
Despite the fact that the unemployment rate has been steadily declining this year, the proportion of Americans working or looking for work has remained practically unchanged. A shortage of jobseekers usually limits hiring and forces companies to pay more to attract and retain employees. Higher wages can help support spending and growth. But it can also contribute to inflation if businesses raise prices to offset higher labor costs, which they often do.
One result is that there are 4.7 million fewer people in jobs today than there were before the pandemic. However, only about 1.7 million of them are actively looking for work and are classified as unemployed. The remaining 3 million are no longer looking for work and are therefore not considered unemployed. The government classifies people as unemployed only if they are actively looking for work.
About half of the 3 million dropouts from the workforce have retired. The other half are parents, mostly mothers, who stayed at home to care for their children when schools and kindergartens are closed. For some of these women, childcare is still unavailable or unaffordable. Some other people have become self-employed. Others continue to postpone their job searches for fear of contracting COVID-19.
Economists disagree over whether more people will soon resume looking for work. Julia Pollack, labor economist at ZipRecruiter, suggested that rising wages, near-record job openings and declining unemployment are encouraging signals for people who are still left on the sidelines.
Other economists are less confident. Many of them expected more women to return to the labor market when schools opened. This did not happen, which suggests that some mothers may have chosen to stay at home forever.
And before COVID, many older Americans retired to get jobs, often for social reasons or for employment reasons. But because the coronavirus poses a particular threat to older people, far fewer retirees are returning to work. With the advent of the omicron variant, this indecision may persist.
Most of the indicators for the US economy were positive in November. Consumer spending has surged ahead of even inflation. Home sales in October grew at the fastest pace in January. A survey of purchasing managers in factories showed that new orders and production were increasing. There were even signs that some manufacturers have eased supply chain confusion a bit.