Disaster Jobs Report: U.S. Economy Added Just 245,000 Jobs in November

US President-elect Joe Biden, removes his facemask, as he announces his economic team at The Queen Theater in Wilmington, Delaware, on December 1, 2020. (Photo by Chandan KHANNA / AFP) (Photo by CHANDAN KHANNA/AFP via Getty Images)
Photo by CHANDAN KHANNA/AFP via Getty Images

The U.S. economy added 245,000 jobs in November and the unemployment rate ticked down to 6.7 percent, according to data released Friday.

Economists surveyed by Econoday had forecast 500,000 jobs and a decline in the unemployment rate to 6.8 percent, one-tenth of a percent October’s 6.9 percent.

The job gains for September were revised up by 39,000 to 711,000, and the change for October was revised down by 28,000, from 610,000. With these revisions, employment in September and October combined was 11,000 more than previously reported.

The private sector added 344,000 jobs in November. October’s private-sector jobs growth was revised day from 906,000 to 877,000. September’s was revised up from 892,000 to 930,000.  While this means the private sector had added nine thousand more jobs than previously thought, it also indicates that the trend in private sector employment gains has been weakening for months instead of bouncing up and down.

The November number offers a bit of vindication for the ADP estimate of the private sector, which had missed official figures through much of the pandemic. On Wednesday, ADP estimated private-sector gains of 307,000, closer than the forecast of many economists.

The labor force participation rate edged down to 61.5 percent in November from 61.7 in October.  This is 1.9 percentage points below its February level. The employment-population ratio, at 57.3 percent, changed little over the month but is 3.8 percentage points lower than in February.

Gains in goods-producing businesses slowed to 55,000 from 107,000 a month ago. Much of that slowdown was in construction, where seasonally adjusted job growth declined from October’s 72,000 to 27,000 in November. Hiring in residential construction slowed to 1,300 from 6,000 in the prior month. On a non-seasonally adjusted basis, employment in construction overall and residential construction actually fell in November. Even though construction employment typicallay falls as winter approaches, the weakness in November is surprising given the strength of the housing market and homebuilding. It may be that the Labor Department’s surveys missed unusual late autumn hiring in this sector.

Manufacturing hiring slowed by 6,000 jobs to 27,000. Within the sector, durable goods manufacturing jobs gains rose to 22,000 from 16,000. That gain was driven by a huge jump in motor vehicle and parts makers, from just 600 jobs in October to 15,400 in November. Non-durable goods manufacturing slowed to 5,000 from 17,000 in the previous month. Overall employment in manufacturing is 599,000 lower than in February.

Perhaps the biggest surprise in the report was that retail lost almost 35,000 jobs, an unusual and troubling signal for the holiday shopping season. That decline is at least partially driven by the seasonal adjustment. On a non-adjusted basis, employment in retail grew by 302,100 jobs.

General merchandising stores dropped 21,000, while sporting goods, hobby, book and music stores declined by 12,000. Electronics and appliance stores were down by 11,000 while health and personal care stores cut 8,000.

The economy has added around 12.3 million jobs in the past seven months, a record-breaking pace after the unprecedented collapse in employment as lockdowns took hold in March and April. The increase in the ranks of employed workers shows that companies ramped up hiring as the economy reopened and consumers came back to stores, restaurants, and other businesses that had been shuttered this spring. Despite the gains, total employment in November was lower than its February level, highlighting just how deep the pandemic cut into what had been the strongest jobs markets in decades.

Yet layoffs remain high, indicating that the pandemic’s effects are still ravaging the economy. A separate report on Thursday showed that 712,000 Americans applied for unemployment benefits in the prior week, the lowest since the pandemic struck but still higher than any week in post-World War 2 U.S. history prior to the pandemic.

The average over the past four weeks is 739,500 initial claims.

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