Jobless rate lowest since beginning of pandemic
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.
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. A continued influx of new job-seekers would help reduce labor shortages.
“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.”
November’s report reflects a divergence in two surveys conducted by the government. The unemployment rate is calculated from a survey of households, which found that 1.1 million more people reported that they were employed last month. A survey of employers, known as the payroll survey, found that just 210,000 jobs were added last month. The results of the two surveys typically match up over the long run, but can show very different results in a specific month.
The survey of households found that the number of unemployed Americans sank in November to 6.9 million, not far above the pre-pandemic number of 5.7 million. And average wages increased a strong 4.8% from a year ago.
For months, employers have been struggling with worker shortages because many people who lost jobs in the pandemic have not returned to the workforce. But last month, nearly 600,000 people found jobs quickly.
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.