The pace of US jobs growth slowed further in November, adding fuel to what’s been borne out by recent high-frequency data: The economic recovery is increasingly cooling in the face of rising COVID-19 cases and renewed lockdowns.
The US Bureau of Labor Statistics released its monthly employment report the morning of December 4th, revealing that the domestic economy gained 245,000 jobs in November, falling short of Bloomberg-surveyed economists’ forecasts for a 460,000 gain. The unemployment rate fell to 6.7% from 6.9% as the labor force participation rate edged lower by 0.2% to 61.5%. Average hourly earnings rose 0.3% month over month and 4.4% year over year, likely signaling lower wage workers remain under pressure. While directionally this jobs number still represents positive jobs growth, as seen in the LPL Chart of the Day, jobs gains are beginning to plateau before coming close to recapturing the historic loss of jobs in April.
A decline in retail jobs headlined this month’s jobs report, as major in-person retailers shunned the seasonal hiring ramp-up of past years. Clothing goods, sports merchandising, and general merchandising stores experienced declines in employment in November as consumers continued to show a preference to shop online and avoid person-to-person contact. Manufacturing and construction jobs showed slight improvements month over month, and leisure and hospitality jobs showed surprising resilience in the face of declining in-person interaction. Healthcare services were characteristically strong, adding more than 59,000 jobs in November.
“November gave us a lot of positive vaccine news, which should start helping the job market over the next few months,” explained LPL Financial Chief Market Strategist Ryan Detrick. “In the meantime, we need to limit the number of people who get left behind against the backdrop of a stalling recovery.”
Always a closely watched economic report, investors and politicians alike have been assigning an increased level of importance to November’s report given its potential to impact fiscal stimulus negotiations. Policymakers in Washington, DC have publicly clashed over the need for another round of fiscal stimulus, in terms of both overall size and timing. A less sanguine jobs report today could give the prominent actors in the negotiations the political cover needed to come off their hardened positions and compromise on a deal before year-end, providing a much-needed jolt to the recovery.
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