Total nonfarm payroll employment rose by 210,000 in November, an increase smaller than the 531,000 new positions added in October, according to the latest jobs report from the U.S. Bureau of Labor Statistics. The unemployment rate decreased by 0.4 percentage points to 4.2% in November.
Zonda chief economist Ali Wolf says the report “doesn’t tell the full story,” as data was negatively impacted by technical seasonal adjustments and upward revisions for November data is expected with the release of the December jobs report. Mark Palim, deputy chief economist at Fannie Mae, shared a similar view on the November jobs report. Palim says the abnormal seasonal pattern of hiring, caused in part by an increase of online shopping instead of shopping at brick-and-mortar stores, makes the November jobs report “difficult to interpret.”
“[The jobs report] painted an inconsistent picture of the labor market. Based on survey responses from employers, the BLS estimates that nonfarm payrolls grew by a disappointing 210,000 in November on a seasonally adjusted basis, a marked deceleration from prior months’ growth,” says Palim. “However, the household survey was much more positive this month, as household employment surged by more than 1.1 million in November and the unemployment rate fell by four-tenths to 4.2%.”
The number of unemployed persons continues to trend downward from their highs at the end of the February-April 2020 recession. The number of unemployed individuals in November, 6.9 million, and the unemployment rate remained above pre-pandemic levels of 5.7 million unemployed individuals with an unemployment rate of 3.5%.
“The report captures today’s two-pronged economy perfectly,” Wolf says. “Professional and business services and transportation and warehousing jobs posted notable increases while the long-battered leisure and hospitality sector continues to struggle. Employers in the leisure and hospitality sector added just 23,000 jobs in November, leaving the sector 1.3 million workers shy of pre-pandemic levels.”
Among the unemployed, the number of permanent job losers declined by 205,000 to 1.9 million but is still 623,000 higher than in February 2020. The number of persons on temporary layoff decreased by 255,000 to 801,000 in November, much lower than its high of 18 million in April 2020. The number of persons on temporary layoffs has nearly reached its pre-pandemic February 2020 level of 750,000. The number of long-term unemployed, 2.2 million, is little changed from October but is 1.1 million higher than in February 2020. Long-term unemployed accounted for 32.1% of the total unemployed in November.
“The employment to population ratio (59.2%) and the labor force participation rate (61.8%) both moved in the right direction last month,” Wolf says. “In fact, the labor force participation rate is now at the highest point since the start of the pandemic. Both indicators, however, remain below February 2020, telling us that while the economy continues to improve, we still have some ways to go.”
According to the Household Survey Supplemental Data, the share of employed persons who teleworked because of the pandemic declined by 0.3 percentage points to 11.3% in November. During November, 3.6 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic, little changed from the 3.8 million in October. Of the 3.6 million, 15.8% received at least some pay from their employer for the hours not worked. Among those not in the labor force in November, 1.2 million were prevented from looking for work due to the pandemic, relatively unchanged from the 1.3 million in October.
According to the report, the largest job growth occurred in professional and business services, transportation and warehousing, construction, and manufacturing. Employment in retail trade declined over the course of November. Construction employment increased by 31,000 in November, following gains of similar magnitudes in September and October.
“We note that residential construction (including specialty trade contractors) grew by over 10,000 in November, a welcome sign for a sector dealing with a backlog of orders,” Palim says. “This strong job growth may help to alleviate the supply constraints present here.”
