Hiring stagnated in November, with companies adding only 210,000 jobs
Job growth stagnated in November, with employers creating a disappointing 210,000 jobs last month, the Labor Department said on Friday. This represents a sharp slowdown from October, when companies added more than double that number of new hires.
Economists had predicted that employers hired about 535,000 workers last month. The unemployment rate fell to 4.2% from 4.6% in October, the Labor Department said on Friday, as more Americans returned to work. Indeed, the labor force participation rate edged up to 61.8% in November, a record high since the start of the pandemic in early 2020.
Millions of Americans have been slow to return to the workforce, with an estimated 4.7 million fewer people in the workforce than before the pandemic. Employers are raising wages to attract candidates, but some workers may still be reluctant to return to work given the high rates of COVID-19 in much of the country due to the Delta variant.
âEven though Delta did not reach its peak in September, the cases are still very high, and this could have impacted sectors susceptible to COVID like retail and hospitality,â said Daniel Zhao, senior economist on the Glassdoor job site.
Investigations for the November employment report were carried out before reports of the Omicron variant first surfaced in Africa, but the new strain of COVID-19 has the potential to create headwinds for the country. labor market in December and later, Zhao noted.
“There are still a lot of unanswered questions about the Omicron variant, but the lesson learned is that the pandemic is in control” when it comes to job growth and the economy, he noted.
Rising infection rates, linked to the Delta variant, likely impacted job growth last month, analysts noted.
“The disappointing 210,000 gain in non-farm payrolls in November suggests that the labor market recovery was faltering even before the potential impact of the new Omicron variant, possibly due to rising infection rates in the Northeast and Midwest, “Andrew Hunter, senior US economist with Capital Economics, said in a report Friday.
Previously low monthly employment figures have been revised upward by the Labor Department.
Even so, there were some bright spots in the report, analysts noted. On the one hand, the participation rate – reflecting the proportion of working adults – reached 61.8% in November, an increase of two tenths of a percentage point. This indicates that more and more people are leaving the sideline and returning to work.
âThe good news is that the unemployment rate has come down for all the right reasons,â said Nick Bunker, director of economic research at Indeed, in an email. “Unemployment has fallen a lot, the employment rate and the labor force participation rate increasing.”
He added: “The prime-age employment-to-population ratio accelerated again in November, increasing by half a percentage point. If it maintains its current pace, this measure will reach its level of ‘before the pandemic in May next year. “
Wages also jumped, with employers offering more pay to lure workers on the sidelines, with average hourly earnings rising 4.8% from a year earlier.
Black workers saw their employment situation improve, with the black unemployment rate falling to 6.7% in November from 7.9% the month before. The unemployment rate for black workers remained higher than that for white workers, the latter at 3.7% in November, but the drop is a positive sign, analysts noted.
âOverall, seeing the black unemployment rate drop significantly is a good sign that a rising tide is lifting all boats,â Zhao said.
Of those who are not working, only around 1.7 million are actively looking for work and are therefore classified as unemployed. The remaining 3 million are no longer looking for work: about half of them are retired, and many more are parents who have dropped out due to childcare issues and are not therefore not counted as unemployed.
The government classifies people as unemployed only if they are actively looking for work.
– The Associated Press contributed to this story.