WORK IN PROGRESS

Jobs report disappoints, but unemployment falls

The US added just 210,000 jobs in November, dashing expectations even as the unemployment rate ticked lower, with more people heading back to work.

Economists had expected a gain of 573,000 jobs, according to a Dow Jones survey, but employers tapped the brakes on hiring, leading to the weakerthan-expected Friday reading.

Still, other data from the Labor Department painted a brighter picture: The unemployment rate fell sharply, from 4.6 percent to 4.2 percent, as 1.1 million people took new jobs last month.

Rising wages — with inflation stuck at 30-year highs — could be luring people back into the job market, economists said. But those same currents — higher shipping costs and snarled supply chains –— could be leading employers to pull back on job openings.

Bankrate senior economic analyst Mark Hamrick acknowledged the disappointing non-farm payroll numbers, but said the drop in the unemployment rate is encouraging — saying that “more progress has been made on this front than was expected a year or so ago.”

It was just in April 2020 that the US shed 20.5 million jobs and the unemployment rate spiked to nearly 15 percent, compared to 3.5 percent in February 2020 before the COVID-19 shutdowns.

Aneta Markowska, the chief economist at investment bank Jefferies, told Dow Jones that the weaker-thanexpected payroll numbers didn’t change the broader picture on the labor market.

“It’s still very healthy and it’s moving toward maximum employment very quickly,” she said.

President Biden briefly addressed the report in a Friday morning news conference, calling the drop in the unemployment rate “incredible news,” even as critics point to what they say is his mismanagement of the economy as inflation threatens to spiral further out of control.

Meanwhile, the report showed average wages surged 4.8 percent from the same time last year as workers benefited from the tight job market. The labor force participation rate also ticked up from 61.6 percent in October to 61.8 percent.

Still, investors seemed focused on the weaker-thanexpected jobs numbers, especially as the Omicron variant of the coronavirus loomed. The S&P 500 tanked 0.9 percent on Friday, while the Dow Jones Industrial Average fell 0.2 percent as traders worried about a potential resurgence in COVID that could jeopardize job gains.

And despite the holiday season shopping rush, retail employment declined by about 20,000 in November, the report showed. Losses were concentrated in clothing, sporting goods and hobby stores but partially offset by gains in grocery and building supply stores.

JJ Kinahan, chief market strategist at TD Ameritrade, called the retail slump a “head-scratcher.”

“Retail being down is odd for this time of year,” Kinahan told Bloomberg. “But we did see strong numbers in important areas — warehousing, construction, and manufacturing, to name a few.”

A potential resurgence in coronavirus cases could jeopardize recent job gains, analysts warn. Over the summer, the spread of the Delta variant jeopardized reopening plans and seemed to temper hiring.

Nonetheless, the Fed is expected to soon wind down its bond-buying program and potentially hike rates next year amid concerns about skyrocketing inflation.

Friday’s jobs report comes after recent encouraging jobless benefits figures.