November jobs report misses forecasts as US adds just 210,000 new jobs amid supply-chain nightmare

Job fair help wanted hiring
In this Sept. 22, 2021, file photo, a hiring sign is placed at a booth for Jameson’s Irish Pub during a job fair in the West Hollywood section of Los Angeles.

  • The US added just 210,000 jobs in November, badly missing the median estimate of 550,000 payrolls.
  • The unemployment rate tumbled to 4.2% from 4.6%. That came in below economist estimates.
  • The report shows hiring slowing as the Delta wave subsided and Omicron fears emerged.

The hiring recovery stumbled in November as the supply-chain crisis charged forward and virus cases swung higher.

The US economy added 210,000 nonfarm payrolls last month, the Bureau of Labor Statistics said Friday morning. That came in far below the median forecast of 550,000 jobs from economists surveyed by Bloomberg.

The report shows hiring slowing dramatically from October’s revised gain of 546,000. November was expected to extend the fall’s healthy job growth after the Delta wave hammered hiring through the summer. Yet new headwinds stood in the way of blockbuster gains. Virus case counts picked up through the month after sliding through October. The supply-chain crisis eased somewhat but remained a risk to the recovery. The various bottlenecks possibly delayed hiring plans at affected firms.

The unemployment rate tumbled to 4.2% from 4.6%, according to the report. Economists anticipated a reading of 4.5%.

The number of unemployed Americans fell by 542,000 in November. Roughly 6.9 million people remained jobless when the report's survey period ended in the middle of last month. The economy also has roughly 3.9 million jobs to recoup before payroll counts return to the pre-crisis high.

The average hourly wage climbed by 8 cents, or 0.3%, last month to $31.03. That fell just short of the consensus estimate of a 0.4% increase. Wage growth has overshot its pre-crisis trend in recent months as firms scramble to rehire. Low wages in service-industry jobs have been thrust into the spotlight as workers point to weak pay as the reason for the labor shortage. With job openings and quits still at historic highs in September, it's likely the labor market's unusual tightness will linger through the end of the year.

There's a good chance the November report is the last before the Omicron variant shows up in hiring data. Cases have already been found in California, Minnesota, and New York, sparking concerns of renewed economic restrictions. The US has already imposed travel bans on several countries to curb the virus's spread. Though little is known about the variant, early signs suggest it spreads quickly.

Even if it's learned that vaccines protect against Omicron, fears of the new variant could hinder the recovery, Federal Reserve Chair Jerome Powell warned in Tuesday testimony to the Senate Banking Committee.

"Greater concerns about the virus could reduce people's willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions," Powell said.

Digging deeper into November's job gains

The Friday release offers the most in-depth look at where hiring was strongest and which sectors struggled the most last month.

Businesses in the professional and business services sector added the most jobs, notching a one-month gain of 90,000 payrolls. The transportation and warehousing sector followed, adding 50,000 jobs. The leisure and hospitality sector, which had been a major source of job gains through the year, slowed hiring dramatically in November, adding just 23,000 jobs over the month.

The retail trade sector lost a seasonally adjusted 20,400 jobs, suggesting that stores aren't seeing as big a of a holiday season hiring boom as normal.

The U-6 unemployment rate — a broader measure that includes people marginally attached to the labor force and those working part-time for economic reasons — slid to 7.8% from 8.3%. The rate has taken on new relevance during the pandemic as millions of Americans remain only partially connected to the job market.

About 3.6 million Americans said they weren't able to work in November because their employers closed due to the pandemic, slightly down the 3.8 million in October.  Roughly 1.2 million Americans cited the coronavirus as the reason they didn't look for work last month, roughly the same as the month prior.

Telecommuting eased as virus cases remained stubbornly high. About 11.3% of employed people worked remotely in November. That compares to 11.6% in October and marks another move toward the pre-crisis normal.

Read the original article on Business Insider