U.S. employers added 245,000 jobs to their payrolls last month. Which is terrible news for the American economy.
In a normal November, the addition of a nearly quarter-million new jobs would be a sign of economic strength. But 2020 is no ordinary year. The U.S. shed 22 million jobs in the first two months of the COVID-19 crisis. Friday’s jobs report leaves the country with 10.7 million fewer paid posts than it had pre-pandemic — and signals a sharp slowdown in the rate of labor market recovery. In October, the U.S. added 610,000 jobs, and economists had expected to see a 460,000 job gain last month, as holiday hiring partially offset the effects of rising COVID case rates. Officially, the true job gain was roughly half that sum — and truth is actually grimmer than the official, headline number would suggest.
The jobs recovery, such as it is, has been driven by the reversal of temporary layoffs, as shuttered businesses reopened their doors. Permanent layoffs, meanwhile, actually rose in November.
What’s more, although the official unemployment rate fell 0.2 points to 6.7 percent, that drop was driven less by the addition of jobs than the subtraction of Americans looking for work: The labor-force participation rate — the percentage of working-age Americans seeking employment — fell from 61.7 percent in October to 61.5 percent. In normal times, this would be a sign that job-seekers were growing so discouraged by the unavailability or low quality of employment opportunities, they’d ceased to look for any. And this is surely part of the story. But the decline is also driven by the whole “a highly contagious, potentially fatal disease is spreading exponentially throughout that country” thing: Roughly 3.9 million Americans sitting on the labor market’s sidelines last month were there because the pandemic prevented them from looking for work (either because of lockdown orders or personal health concerns).
COVID-induced contractions in the size of the labor force will get worse before they get better. More than 100,000 Americans are currently hospitalized with the disease, and the nation saw 210,161 new cases Thursday, both record highs. Meanwhile, absent congressional action, unemployment aid and eviction protections for renters are set to expire by year’s end.
To the extent that the jobs report offers good news, it may be this: A stronger report could have sapped the momentum that’s been growing behind a $908 billion bipartisan stimulus package in Congress. Although inadequate to the scale of the nation’s needs, the legislation would provide unemployed Americans with an extra $1,200 a month in benefits, and send another $300 billion in aid to the nation’s small businesses, among other vital provisions.