HomeBusinessInvestingU.S. Labor Market Recovery Lost Steam In November With A Sluggish 210,000...

U.S. Labor Market Recovery Lost Steam In November With A Sluggish 210,000 New Jobs


Though unemployment fell to its lowest level in nearly two years, the U.S. added back a worse-than-expected 210,000 jobs in November—indicating the labor market is still struggling to add back jobs lost during the pandemic amid the looming threat of a new coronavirus variant.

Key Facts

November’s new job gains were significantly less than the roughly 575,000 new jobs expected by economists, according to data released Friday by the Labor Department.

Despite the worse-than-expected report, the unemployment rate clocked in at 4.2%, compared to 4.6% in October—hitting its lowest point in more than a year but still well above pre-pandemic levels of about 3.5%.

The number of unemployed people in the United States fell by 542,000 to 6.9 million, which is much better than pandemic highs around April 2020 but still more than 5 million in February 2020, the government said.

Additionally, the labor force participation rate, which measures the percentage of workers who are employed or actively seeking employment, edged up to 61.8% but has barely budged since June 2020.

The U.S. has thus far recovered about 80% of the 20.5 million jobs U.S. employers cut between March and April of last year.

Crucial Quote

“Friday’s weaker-than-expected jobs report adds to the fear we’ve seen this week with the omicron variant, and it may stoke fears of stagflation, which consists of slower economic growth and higher inflation,” Jay Pestrichelli, the CEO of Florida-based investment firm Zega Financial, said in an email. The report may still encourage the Federal Reserve to ease on its pandemic-era stimulus policy, which has buoyed markets for the past 20 months, Pestrichelli said. “In an odd twist, the lower growth paired with potential supply chain issues from the new omicron variant may actually cause the Fed to raise rates more aggressively than previously thought—all in an effort to fight rising inflation.”

Key Background

The mixed jobs data on Friday highlights the ongoing struggles around U.S. employment, with rising Covid cases and labor shortages among the biggest roadblocks to a full recovery. After adding more than 1 million jobs in July, employment unexpectedly fell for two months straight this summer as the delta variant of Covid-19 triggered a rise in infections. The labor market nevertheless minted a strong recovery as case counts declined in recent weeks, with the U.S. adding back a better-than-expected 531,000 jobs in October—marking the best monthly showing since July. I might rewrite this to say, President Joe Biden touted the recovery late last month, arguing that employment has recovered faster than after the Great Recession of 2008.

Surprising Fact

The unemployment rate hit a record high of 14.7% at the height of pandemic uncertainty in April 2020.

What We Don’t Know

“While we are on guard for any possible impacts from the Omicron variant news, it’s too early to be seeing that the data,” says Bankrate analyst Mark Hamrick. “There are many questions yet to be answered regarding possible, if any, future economic impacts.” On Wednesday, the United States became the latest country with a reported case of the variant, which was first discovered in South Africa just one week ago and has since spread to at least 24 nations.

Further Reading

Number Of Americans On State Unemployment Benefits Falls Below 2 Million For First Time Since Pandemic Lockdowns (Forbes)

Jobless Claims Hit New Pandemic Low As Number Of Americans Receiving Unemployment Benefits Falls To 2.7 Million (Forbes)

U.S. Labor Market Posts Worst Month This Year As 7.7 Million Americans Remain Unemployed (Forbes)

Stay Connected
Must Read
You might also like


Please enter your comment!
Please enter your name here