Yuma Sun

Jobless rate sinks to 4.2% as more people find jobs

- BY CHRISTOPHE­R RUGABER aP ecOnOmIcS WrIter

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 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 increase of 546,000.

But other data from the Labor Department’s report painted a 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, pulled back on 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 fall 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.

November’s report reflects a divergence in two surveys that the government conducts each month. The unemployme­nt rate is calculated from a survey of households. For last month, this survey found that 1.1 million more people reported that they were employed. A separate survey of employers, called the payroll survey, reported just 210,000 added jobs.

Though the results of the two surveys typically match up over the long run, they can differ sharply in any one month. For November, economists noted that the big employment gain in the household survey brought that figure in line with the larger increases in the payroll survey during previous months.

The hiring gains in the payroll survey have also been revised up substantia­lly in recent months, and some economists suggested that this will likely happen again in coming months.

“My sense is the household estimate is closer to the truth around what is happening in the jobs market and ... should anticipate a significan­t upward revision to the November data next month,” said Joseph Brusuelas, an economist at RSM, a tax and advisory firm.

The household survey also captures self-employed and gig workers, whose ranks have grown steadily since the pandemic struck, unlike the payroll survey. Some economists attribute part of the nation’s labor shortage to an increase in people who have recently gone to work for themselves.

Friday’s report showed that the number of unemployed Americans sank in November to 6.9 million, compared with the pre-pandemic number of 5.7 million. And average wages, which have been rising as employers try to attract or keep workers, 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, 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.

Even as the jobless rate has steadily declined this year, the proportion of Americans who are working or searching for jobs has barely budged, at least until this month. A shortage of job-seekers tends to limit hiring and force companies to pay more to attract and keep employees. Higher pay can help sustain spending and growth. But it can also feed inflation if businesses raise prices to offset their higher labor costs, which they often do.

BY THE NUMBERS Dow Jones Industrial­s: – 59.71 to 34,580.08 Standard & Poor’s: – 38.67 to 4,538.43 Nasdaq Composite Index: – 295.85 to 15,085.47

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