Jobs Take a Steep Dive in November As Labor Market Struggles To Grow

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The jobs report issued on Friday, Dec. 3 shows 210,000 jobs added in November, well below analyst expectations of 550,000 reported by Bloomberg. The labor market has struggled to bounce back during the past year due to ongoing effects of the pandemic. The new threat of the Omicron variant might not have been captured in November’s job data, but the report does highlight Americans’ unwillingness to swiftly return to the workplace.

See: Consumer Confidence Declines in November as Inflation Remains a High Concern
Find: A Look at Unemployment Numbers in Every State

Although new jobs numbers were disappointing, the Bureau of Labor Statistics also reported that the unemployment rate fell by 0.4 percentage points to 4.2%. The number of unemployed persons fell by 542,000 in November to 6.9 million. The BLS stated that both measures are down considerably from their highs at the end of the February-April 2020 recession that came as a result of the virus’ onset. 

However, the addition of 210,000 jobs indicates a sharp decline in growth, as the labor participation rate ticked up to 61.8 % in November from 61.6% in October but remains 1.5 % lower than pre-pandemic thresholds. 

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Child care issues and COVID-related concerns are among the reasons most often cited for holding people back from returning to the workforce, said Loretta Mester, president of the Federal Reserve Bank of Cleveland, in a conversation with the Financial Times. Federal Reserve Chairman Jerome Powell also warned of Omicron fears exacerbating labor market strains in his testimony before Congress earlier this week.

See: As Omicron ‘Aggravates’ Supply Chain and Inflation Concerns, OECD Backpedals on Global Economic Growth Report
Find: What To Do If Your Unemployment Is About To Run Out

The report comes amid inflation levels sitting at a 30-year high, hovering around 6%, with employers forced to raise wages in order to attract reluctant workers back to the workplace. Wages rose another 0.3% month-over-month, the Financial Times reported, bringing the annual pace of wage growth to 4.8% — still under current inflation levels. 

The number of long-term unemployed — those who’ve been jobless for 27 weeks or more — remained little changed in November with 2.2 million, but that is still 1.1 million higher than in February 2020. The long-term unemployed accounted for 32.1% of the total unemployed in November.

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About the Author

Georgina Tzanetos is a former financial advisor who studied post-industrial capitalist structures at New York University. She has eight years of experience with concentrations in asset management, portfolio management, private client banking, and investment research. Georgina has written for Investopedia and WallStreetMojo. 

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