The lockdowns across the country appear to be taking their toll on the economy as hiring slowed in November with companies creating only 245,000 jobs — the fewest since the recovery from the pandemic began. The unemployment rate dropped to 6.7 percent largely due to a drop in the labor participation rate.
In all, the economy has brought back 12.3 million of the 22 million jobs lost in the first two months of the crisis. There are still 10.7 million Americans considered unemployed, compared with 5.8 million in February.
The total of permanent job losers remained at 3.7 million in November, but is up 2.5 million from February.
At the pace added in November, the economy would not be back to pre-pandemic employment levels until 2024, according to Daniel Zhao, senior economist at job placement site Glassdoor.
It would help tremendously if governors stopped opening and closing businesses like a revolving door. The uncertainty is preventing many companies from hiring additional help. They may just have to lay off more workers in a couple of weeks.
“Overall, it is a disappointing report,” economists at Jefferies said in a note. “With COVID cases surging again and policies being put in place to try and slow the spread, hiring has slowed down. Also, worker availability is a significant limiting factor as well, with many unable to go to work due to COVID concerns or family care obligations.”
Despite the disappointing number, markets showed little reaction, with Wall Street expecting a higher open.
Job gains and losses tell the tale of government-imposed lockdowns.
Professional and business services added 60,000 and health care was up 46,000. The battered hospitality industry, which has taken the worst of the job losses during the pandemic, increased just 31,000, while retail lost 35,000 jobs, a potentially troubling sign heading into the holiday shopping season.
The losses in retail come just as stores are ramping up hiring for the holiday season. But with people doing most of their Christmas shopping online, the number of job gains in retail won’t be as large as it was in years past.
The economy created 145,000 jobs in the warehousing and transportation sectors, reflecting the new economic reality in the country that purchasing online is accelerating. This trend is likely to continue after the pandemic emergency has ended.
There is so much slack in the labor market now that there will almost certainly be a burst of hiring when all the lockdowns are lifted and some semblance of normalcy returns to the country. The size of the burst will depend on how many companies are left standing after the lockdowns end.