The unemployment rate fell, but for the wrong reason – about 400,000 more people stopped looking for work and were left out of the jobless count.
(CN) — With coronavirus cases surging and experts warning of a dark winter, the government reported Friday that the U.S. economy added back just 245,000 jobs in November, marking the fifth straight month of slowdown.
Last month’s job gains were the lowest since April, falling well short of the revised 610,000 jobs added in October. The unemployment rate now stands at 6.7%, compared to 6.9% a month ago.
The Labor Department report released Friday shows most of the jobs recovered in November were in the transportation and warehousing sector, which added 145,000 positions. Professional and business services jobs grew by 60,000 while education and health services added back 54,000 jobs.
The leisure and hospitality industry – which includes bars and restaurants devastated by the pandemic – recovered 31,000 jobs last month. Construction and manufacturing each added back 27,000 jobs.
Meanwhile, retail trade lost 34,700 jobs and there were 99,000 fewer positions in government, many of which were temporary census jobs.
Nick Bunker, economic research director at Indeed Hiring Lab, called Friday’s jobs report “both a wakeup call and a warning.”
“Coronavirus cases are surging throughout the country and several federal relief programs are set to expire this month. Progress in the labor market has slowed at the worst possible time. We might be optimistic about the spring, but the winter could bring another round of economic pain,” he wrote.
He said 2021 could bring better economic news thanks to promising vaccine candidates, but warned vaccines are “not a cure-all for the economy.”
“A vaccine will not re-open closed businesses or reimburse lost wages. In the absence of renewed fiscal relief or a jump in job growth in the months ahead, millions of people could be in for a dire winter,” Bunker said.
The U.S. economy is still about 10 million jobs short of where it was before the pandemic hit. More than 20 million jobs were lost in March and April when the virus first shut down businesses and kept people at home.
Elise Gould, senior economist at the nonprofit think tank Economic Policy Institute, said holiday hiring in November didn’t make up for other factors slowing the recovery. She also noted expanded unemployment insurance benefits will expire the day after Christmas.
“This spells trouble not only for workers and their families who are desperately trying to keep a roof over their heads and put food on the table—especially with the eviction moratorium also set to expire on December 31—but also for the recovery itself,” she wrote. “It didn’t have to be this way.”
Gould said over 5 million jobs could be created next year if lawmakers extended pandemic unemployment programs through 2021. She said relief efforts should focus on helping state and local governments.
The unemployment rate also fell for the wrong reason last month – about 400,000 more people stopped looking for work and were left out of the jobless count.
The number of workers who have been unemployed for 27 weeks or longer grew by 385,000 in November to 3.9 million, making up more than a third of total unemployment, according to the Labor Department.
Joel Naroff of Naroff Economics said next month’s jobs report could be even worse.
“What is disconcerting is that we have yet to see the full impact of the growing number of restrictions caused by the failure to take steps to keep the virus from getting totally out of control,” he wrote. “There could be a lot of more cutbacks in the December report.”