The Labor Department said Friday that employers recorded their weakest hiring of the year in November, adding only 210,000 jobs on a seasonally adjusted basis.
Economists expected the number to be above half a million for the second month in a row. The shortfall was especially noticeable given that the data was collected prior to the emergence of the Omicron version of the coronavirus, the latest turning point in the pandemic.
However, there was good news in the report. A survey of households showed a huge jump in total employment. The labor force grew by hundreds of thousands and the unemployment rate fell from 4.6 percent to 4.2 percent.
The conflicting data presents President Biden and policymakers with new complications, especially given the potential impact of O’Micron has yet to be established. The report also provides businesses with some clues about the months ahead.
With inflation rising to the highest rate in decades, Federal Reserve officials are considering whether to step up efforts to rein in prices. And the Biden administration is eager to point to a speedy recovery as a validation of its policies – including the US rescue plan, the $1.9 trillion stimulus package signed in March.
But Mr Biden has been forced to admit that many Americans do not feel that improvement and have become more pessimistic about the economy and its handling.
On Friday, he lauded the drop in the unemployment rate as a confirmation of his administration’s policies, acknowledging mixed signals in the jobs report.
“Our economy is much stronger than it was a year ago,” he said. But he adds: “It’s not enough to know that we’re making progress. You have to see and feel it in your life — around the kitchen table, in your checkbook.”
Economic indicators were already unclear. Consumer confidence readings have remained low, but Americans are on a spending spree, and investors remain unfazed. Shares fell on Friday but remain close to record highs.
The low recruitment numbers in the latest government report are a reminder of the uneven pace in the labor market since the pandemic began nearly two years ago.
Job gains in businesses that require face-to-face contact such as stores, restaurants, bars and hotels were particularly soft last month. Retail employment declined 20,000 on a seasonally adjusted basis, while hiring in the leisure and hospitality industries increased by 23,000, compared to a 170,000 increase in October.
Part of the puzzle in the figures released Friday is because the Labor Department reports based on two surveys, one polling household and the other recording hiring between employers.
american jobs status
The pandemic is affecting the US economy in many ways. The job market is an important factor to keep an eye on and how it changes as the economic recovery progresses.
For nearly half a year, the survey of households was showing significantly weaker job growth than its peer survey – until last month, when it was much stronger. It showed overall employment, for example, increased by 1.1 million, adjusted seasonally.
Economists generally place more trust in employer surveys, which have very large sample sizes. So the recent pattern suggests that the household survey was calculating employment and, in fact, caught on in November.
The overall participation rate – which measures the proportion of Americans who have a job or are looking for one and is based on household surveys – rose 0.2 percentage points to 61.8 percent, the highest since the pandemic hit. healthy level. The rate for prime-age workers aged 25 to 54 also rose.
There was a large increase in participation among Hispanic men and women who were most affected by the pandemic.
The president and his advisers sought to shed light on the better indicators provided by the household survey. “It took us nine years to bring the unemployment rate down to this low level since the last economic downturn,” said Jared Bernstein, a member of the White House Council of Economic Advisors. The Congressional Budget Office “thought we wouldn’t be here until 2024,” he said, “and here we are in 2021.”
37-year-old Alejandro Merchan is among activists who have managed to make a comeback.
In March 2020, Mr. Marchan was a server at Progress, a bustling San Francisco restaurant. When the city closed all non-essential businesses, it was shut down. But he said the additional federal unemployment benefits helped him and other friends in the industry avoid hardship.
“The money I was earning from unemployment was not at all comparable to what I was making,” Mr Marchan said. “I’ll just say that I was able to break even.”
That stability brought him many benefits. Rather than feel pressured to take on any low-paying service sector work, Mr. Merchan was able to look for a longer job. He moved an hour north of Santa Rosa and eventually found a position while working at Matheson, an upscale farm-to-table restaurant in Sonoma County frequented by wine-thirsty eaters who generously give a tip.
Many labor market analysts argue that there is still room for job growth because many people have yet to return to the labor force, and because businesses overall have come out of the worst-hit by the pandemic in a stronger financial position.
“To me, the most important question in an economy going forward is this: Will companies improve jobs enough to bring people back into employment and face those high risks?” Aaron Sojourner, a professor at the University of Minnesota and a former economist on the Economic Advisory Council for the last two administrations, said.
With many jobs offered, salary hikes have followed. According to Friday’s report, median hourly earnings for non-supervisory workers rose 8 cents to $31.03 in November and is up 4.8 percent from a year ago.
An October survey from the National Association of Independent Businesses, which represents small-business owners and managers, found that 49 percent of owners reported job openings that could not be filled, 44 percent of owners reported increased compensation, and 32 percent reported over the next three months. Plan to increase compensation.
At Jabil, an electronics designer and manufacturer based in St. Petersburg, Fla., 270 employees joined the company in November, about half in entry-level roles.
For those employees, wages in many places have risen from $16 two years ago to $18 an hour, according to Bruce Johnson, Jabil’s chief human resources officer.
“Undoubtedly hiring people is a challenge,” Mr Johnson said. Jabil has 240,000 employees worldwide, of whom about 12,000 are in the United States. “We are competing with everyone from Amazon to small and large manufacturers to retailers and restaurants.”
That competition has given workers new leverage. The “quit rate” – a measure of workers leaving a job as part of overall employment – has been at or near a record high, suggesting that workers are more likely to believe they navigate the labor market to find something better. can do.
The downside is that although workers in low-paying sectors, such as leisure and hospitality, are seeing average wage gains, average wage growth hasn’t kept up with rising prices, rising 6.2 percent in October from a year earlier. Latest University of Michigan Consumer Sentiment Survey “Points to the growing confidence among consumers that no effective policy has yet been developed to mitigate the damage caused by rising inflation.”
In recent days, the chairman of the Federal Reserve, Jerome H. Powell, has faced pressure from various political circles to focus more on price increases.
Fed officials, including Mr. Powell, still maintain that price increases primarily reflect pandemic aberrations that will end. but in Congress’s testimony on Tuesday, Mr. Powell indicated a pivot from stimulating growth to controlling prices.
“The economy is very strong, and inflationary pressures are high,” he said. “Therefore, in my view it is appropriate that we consider completing the taper of our asset purchases.”
As the Fed begins that pivot, however, the economy remains short of nearly four million jobs from pre-pandemic levels, and the Omicron version offers new uncertainty.
Scott Anderson, chief economist at Bank of the West in San Francisco, said of the potential job impact of the variant, “It’s a risk, but it probably won’t be visible before Christmas.” “That could be an issue in the new year.”
Thomas Jonas, co-founder and chief executive of Nature’s Find, a maker of fungus-based food products, said the Omicron variant “is a real concern.”
But after adding nine people in November, bringing their workforce to 160, they still plan to hire around 100 employees in 2022. Most will work at the company’s headquarters in the East Stockyard on the south side of Chicago.
They are confident that consumer demand will justify their hiring. “I don’t have a crystal ball, but as far as we’re concerned, we’re looking at fundamental trends,” he said.
Ben Castleman And Jim Tankersley Contributed to reporting.