US jobless rate sinks to a pandemic low of 4.2%

Hiring nevertheless slowed in November amid virus, inflation, labor and supply chain woes

WASHINGTON — America’s unemployment rate tumbled last month to its lowest point since the pandemic struck, even as employers appeared to slow their hiring — a mixed picture that pointed to a resilient economy that’s putting more people to work.

The government reported Friday that private businesses and other employers added just 210,000 jobs in November, the weakest monthly gain in nearly a year and less than half of October’s gain of 546,000.

But other data from the Labor Department’s report painted a much brighter picture. The unemployment rate plummeted from 4.6% to 4.2% as a substantial 1.1 million Americans said they found jobs last month.

The U.S. economy still remains under threat from a spike in inflation, shortages of labor and supplies and the potential impact of the omicron variant of the coronavirus. But for now, Americans are spending freely, and the economy is forecast to expand at a 7% annual rate in the final three months of the year, a sharp rebound from the 2.1% pace in the previous quarter, when the delta variant hobbled growth.

Employers in some industries, such as restaurants, bars, and hotels, sharply slowed their hiring in November. By contrast, job growth remained solid in areas like transportation and warehousing, which are benefiting from the growth of online commerce.

The sharp drop in the unemployment rate was particularly encouraging because it coincided with an influx of a half-million job seekers into the labor force, most of whom quickly found work. Normally, many such people would take time to find jobs and would be counted as unemployed until they did. The influx of new job seekers, if it continues, would help reduce the labor shortages that have bedeviled many employers since the economy began to recover from the pandemic.

“That’s good news for job seekers and workers, and for businesses too,” said Julia Pollak, chief economist at online jobs site ZipRecruiter. “It looks like the supply constraints are easing a bit with the unemployment rate low and wage growth high” — two factors that often encourage people to search for work.

For months, employers have been struggling with worker shortages because many people who lost jobs in the pandemic have not, for various reasons, returned to the workforce. But last month, nearly 600,000 people came off the sidelines to look for jobs and were generally hired quickly. The government classifies people as unemployed only if they’re actively seeking work.

As a result, the proportion of Americans who are in the workforce rose from 61.6% to 61.8%, the first significant increase since April. If that much-anticipated development continues, it could point to stronger job growth ahead.

The jobs outlook for the coming months has become hazier with the emergence of the omicron variant though widespread business shutdowns are considered unlikely.