The numbers: The US gained 210,000 new jobs in November despite businesses taking more aggressive steps to hire, a disappointing gain that suggests the worst labor shortage in decades remains. obstacle to economic recovery.
The hiring increase – the smallest in a year – was far below Wall Street expectations. Economists polled by The Wall Street Journal had forecast 573,000 new jobs.
“Along with low unemployment and record-low layoffs, the labor shortage is only getting worse,” said Sal Guatieri, senior economist at BMO Capital Markets.
Meanwhile, the US unemployment rate fell from 4.6% to 4.2% and hit a new pandemic low. However, economists say the official rate may underestimate the true unemployment level by several percentage points.
In another encouraging sign, the size of the workforce has increased significantly. About 594,000 people returned to the workforce in November, based on a separate survey of households.
The so-called participation rate rose two ticks to 61.8% and hit its highest level since the start of the pandemic.
The Household Poll also showed 1.14 million people found work in November, which is why the unemployment rate dropped sharply. However, the household data was more volatile than the corporate payrolls survey from which the government outputs the official increase in employment.
Want information on all the news moving markets every day? Sign up for our daily Need to Know newsletter.
Businesses have sought to respond to labor market shortages by increasing wages and benefits. Hourly wages rebounded sharply last month, and wages have risen 4.8% over the past year. The last time wages rose so quickly before the pandemic was in the early 1980s.
Big picture: Businesses still cannot attract workers fast enough to meet their needs.
At current hiring rates, employment levels in the US may not return to pre-crisis trends for two years – or more. The longer the labor shortage persists, the longer it will take for the US economy to fully recover.
The number of people retiring during the pandemic is unusually higher, and millions more are still too anxious to return to work. They fear exposure to the coronavirus or worry they may have to stay home to care for their children, especially if new strains of coronavirus emerge and schools close again.
The November increase in labor force size is good news, but it remains to be seen whether the uptrend can be sustained.
What are they saying? “This report is a story of two surveys,” said Nick Bunker, director of economic research for North America at the Fact-Employment Lab.
“The household survey shows rapid employment growth, workers returning to the workforce and low levels of involuntary part-time work,” he said. “The wage survey shows a significant deceleration in job growth, particularly in Covid-affected sectors.”
Market reaction: Dow Jones Industrial Average
was set to open higher in Friday trades. Market extended gains after the report.
https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-november-11638537320?rss=1&siteid=rss US added 210,000 disappointing jobs in November due to severe labor shortage