US added just 210k jobs in weaker than expected November report

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The US added just 210,000 jobs in November, dashing expectations even as the unemployment rate ticked lower, with more people saying they were heading back to work.

Economists had expected a gain of 573,000 jobs, according to a Dow Jones survey, but employers tapped the brakes on hiring, leading to the weaker-than-expected Friday reading.

Still, other data from the Labor Department painted a brighter picture: The unemployment rate fell sharply, from 4.6 percent to 4.2 percent, as 1.1 million people took new jobs last month.

Rising wages — with inflation stuck at 30-year highs — could be luring people back into the job market, economists said. But those same currents — higher shipping costs and snarled supply chains — could be leading employers to pare back on job openings.

Bankrate senior economic analyst Mark Hamrick acknowledged the disappointing non-farm payrolls numbers, but said the drop in the unemployment rate is encouraging — saying that “more progress has been made on this front than was expected a year or so ago.”

It was just in April 2020 that the US shed 20.5 million jobs and the unemployment rate spiked to nearly 15 percent, compared to 3.5 percent in February 2020 before the COVID-19 shutdowns.

Aneta Markowska, the chief economist at investment bank Jefferies, told Dow Jones that the weaker-than-expected payrolls numbers didn’t change the broader picture on the labor market.

“It’s still very healthy and it’s moving toward maximum employment very quickly,” she said.

President Joe Biden briefly addressed the report in a Friday morning press conference, calling the drop in the unemployment rate “incredible news.”

“America is back to work and our jobs recovery is very strong,” insisted Biden, who spoke in a hoarse voice he attributed to a cold.

November jobs report
Bureau of Labor Statistics

The jobs report also showed that average wages surged 4.8 percent from the same time last year as workers benefited from the tight labor market. The labor force participation rate also ticked up from 61.6 percent in October to 61.8 percent in November.

Still, investors seemed focused on the weaker-than-expected jobs numbers, especially as the Omicron variant of the coronavirus loomed: The S&P 500 tanked 0.9 percent on Friday, while the Dow Jones Industrial Average fell 0.2 percent as traders worried about a potential resurgence in COVID cases that could jeopardize recent job gains.

However, despite the holiday season shopping rush, retail employment declined by about 20,000 in November, the report shows. Losses were concentrated in clothing, sporting goods and hobby stores but partially offset by gains in grocery and building supply stores.

The US added just 210,000 jobs in November, seriously underperforming analyst expectations.
The US added just 210,000 jobs in November, seriously underperforming analyst expectations.
AFP via Getty Images

JJ Kinahan, chief market strategist at TD Ameritrade, called the retail slump a “head-scratcher.”

“Retail being down is odd for this time of year,” Kinahan told Bloomberg. “But we did see strong numbers in important areas — warehousing, construction, and manufacturing, to name a few.”

A potential resurgence in coronavirus cases could jeopardize recent job gains, analysts warn.

Over the summer, the spread of the Delta variant jeopardized reopening plans and seemed to reduce hiring by employers. Now, some worry that the Omicron variant — which was detected in New York this week — could do the same in December and the new year.

“Concern about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” Federal Reserve Chairman Jerome Powell told Congress on Tuesday.

Nonetheless, the Fed is expected to soon wind down its bond-buying program and potentially hike rates next year amid concerns about skyrocketing inflation. Biden said Friday that his administration was taking steps to fight inflation and that gas prices are set to decline in the coming weeks.

Friday’s jobs report comes after recent encouraging jobless benefits figures. On Thursday, the Labor Department revealed that 222,000 people had filed for unemployment benefits ahead of the Thanksgiving holiday — a modest jump from the previous week but still near low pre-pandemic levels.

 

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