The Lackluster November Jobs Report May Be Good News As It Serves To Push For Another Round Of Stimulus
Employment rose by 245,000, while the unemployment rate dropped down to 6.7% in November, according to the U.S. Bureau of Labor Statistics on Friday.
Despite the strong headwinds of curfews, shutdowns, a deepening increase in Covid-19 cases and companies delaying business decisions (as they await the rollout of the vaccine), the economy and job market withstood the stormy weather. It was reported that “14.8 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic.” Understandably, the pace of hiring was muted due to the continued adverse effects of the pandemic on a number of important sectors.
The Department of Labor pointed out the discouraging statistics, “The number of unemployed persons, at 10.7 million, continued to trend down in November, but is 4.9 million higher than in February.” The jobs report indicated, “In November, the number of long-term unemployed (those jobless for 27 weeks or more) increased by 385,000 to 3.9 million, accounting for 36.9% of the total unemployed.”
Long-term unemployment is a pernicious problem. People burn through their savings and they can’t collect unemployment benefits after 26 weeks. This has a deleterious impact on their self-confidence. When they interview, there is an unspoken bias against long-term unemployed candidates, as hiring managers question their abilities and wonder why they haven’t been hired by someone else after so much time has elapsed.
Last year at this time, the economy boasted a 50-year low for unemployment at 3.5%. In 2019, the November jobs report marked 110 consecutive months of jobs gains. Wages and salaries had risen by 3.1%-the biggest increase in a decade.
Some interesting Labor Department statistics include:
- Employment in transportation and warehousing rose by 145,000 in November, but is 123,000 below its February level.
- In November, employment rose by 82,000 in couriers and messengers and by 37,000 in warehousing and storage; since February, employment in these industries has increased by 182,000 and 97,000, respectively. Job growth also occurred over the month in truck transportation (+13,000).
- In November, employment in professional and business services increased by 60,000, with about half the gain occurring in temporary help services (+32,000). Job growth also occurred in services to buildings and dwellings (+14,000). Employment in professional and business services is down by 1.1 million since February.
- Healthcare added 46,000 jobs in November, with gains occurring in offices of physicians (+21,000), home health care services (+13,000) and offices of other health practitioners (+8,000). Nursing care facilities continued to lose jobs (-12,000). Healthcare employment is 527,000 lower than in February.
- Construction gained 27,000 jobs in November, but employment is 279,000 below its February level. In November, employment rose in residential specialty trade contractors (+14,000) and in heavy and civil engineering construction (+10,000).
- In November, manufacturing employment increased by 27,000. Job gains occurred in motor vehicles and parts (+15,000) and in plastics and rubber products (+5,000). Employment in manufacturing was 599,000 lower than in February.
- Financial activities added 15,000 jobs in November. Gains occurred in real estate (+10,000) and in nondepository credit intermediation (+8,000). Financial activities has added 164,000 jobs over the past 7 months, but employment in the industry is 115,000 lower than in February.
- Government employment declined for the third consecutive month, decreasing by 99,000 in November. A decline of 86,000 in federal government employment reflected the loss of 93,000 temporary workers who had been hired for the 2020 Census. Employment in local government education continued to trend down (-21,000).
- In November, retail trade lost 35,000 jobs, reflecting less seasonal hiring in several retail industries. Employment decreases occurred in general merchandise stores (-21,000); sporting goods, hobby, book, and music stores (-12,000); electronics and appliance stores (-11,000) and health and personal care stores (-8,000). By contrast, furniture and home furnishings stores and automobile dealers added 6,000 jobs and 4,000 jobs, respectively. Employment in retail trade is 550,000 lower than in February.
- Employment in leisure and hospitality changed little in November (+31,000), but is down by 3.4 million since February. Arts, entertainment and recreation added 43,000 jobs in November, while employment in food services and drinking places changed little (-17,000).
- The unemployment rate for adult women (6.1%) declined in November. The jobless rates for adult men (6.7%), teenagers (14%), whites (5.9%), Blacks (10.3%), Asians (6.7%) and Hispanics (8.4%) showed little or no change.
Certain unemployment will expire at the end of this month, which would put roughly 9 million people without any jobless assistance. The economy has only regained about 12 million of the 22 million jobs lost at the nadir of the virus outbreak in March and April. Since then, hiring has been slow.
There is this seemingly contradictory view of the unemployment numbers. Lackluster hiring could actually be good news. It demonstrates the immediate need to jump start the economy, especially before the U.S. heads into another period of lockdowns. As businesses are once again ordered to shutdown or downgrade their operations, many will permanently close and workers will face massive layoffs. This potential scenario will place pressure on Federal Reserve Chair Jerome Powell and Congress to swiftly offer another round of stimulus, which will reignite the economy, create more jobs and help out those in need.
Originally published at https://www.forbes.com.