The unemployment rate in the United States has fallen to its lowest point since the pandemic broke out last month, even though employers seemed to be delaying employment.
The government reported on Friday that businesses and other employers added just 210,000 jobs in November. This is the weakest monthly increase in almost a year, less than half of the 546,000 increase in October.
However, other data from the Ministry of Labor report drew a brighter picture. The unemployment rate plummeted from 4.6% to 4.2%. That’s because virtually 1.1 million Americans said they got a job last month.
The US economy remains threatened by rising inflation, labor and supply shortages, and the potential impact of the Omicron variant of the coronavirus. But so far, Americans are free to spend, the economy is projected to grow at an annual rate of 7% in the last three months of this year, and the delta variant has hampered growth at a pace of 2.1% in the previous quarter. Is recovering rapidly from. ..
Employers in some industries, such as restaurants, bars and hotels, dropped hiring in November. In contrast, employment growth continued to be strong in areas such as transportation and warehousing that benefited from the growth of online commerce.
The decline in unemployment was especially encouraging, as 500,000 job seekers flowed into the workforce, most of whom found jobs quickly. Many such people usually take a long time to find a job and are counted as unemployed until they find one. Continued influx of new job seekers will help reduce the labor shortage that has plagued many employers since the economy began to recover from the pandemic.
Julia Pollak, Chief Economist at ZipRecruiter, an online recruiting site, said: “Low unemployment and high wage growth seem to ease supply constraints a bit.” —Two factors that encourage people to look for jobs.
The November report reflects the differences between the two monthly government surveys. The unemployment rate is calculated from a household survey. Last month, the survey found that more than 1.1 million people reported they were employed. Another employer survey, called a payroll survey, reported 210,000 additional jobs.
The results of the two studies are usually consistent in the long run, but can vary significantly over the course of a month. Economists in November pointed out that the significant increase in employment in the household survey resulted in numbers consistent with the significant increase in the salary survey last month.
Increased hiring in payroll surveys has also been significantly revised in recent months, and some economists have suggested that this is likely to happen again in the coming months.
“In my sense, household estimates are close to the truth about what’s happening in the employment market, and we need to anticipate a significant upward revision of data for November next month,” Advisory Farm.
Unlike salary surveys, the household survey also targets self-employed people and gig workers whose ranks are steadily rising since the outbreak of the pandemic. Some economists attribute some of the country’s labor shortage to an increase in the number of people who have recently gone to work for them.
Among them is Daniel Nolan of Raleigh, North Carolina. Like millions of other Americans, 36-year-old Nolan turned his life and work upside down with COVID-19. His 9-year-old son was in a virtual school early in the pandemic. His cancer-stricken father-in-law moved with his family and urged Nolan to quit his job as a software engineer at a private equity firm.
Nolan expected this period to last only a few months. But when he started looking for a job again, the job he got wasn’t what he was looking for. So in August he decided to attack himself.
So far, Mr. Nolan said he is earning about the same income as before. He will continue consulting for at least another two years and may never return to work for the company.
“I can make at least as much as I did in my previous job, and I still have the flexibility to be a consultant,” he said.
The number of unemployed Americans fell to 6.9 million in November, compared to 5.7 million before the pandemic, according to a report on Friday. In addition, the average wage that employers are raising to attract and retain workers has risen sharply to 4.8% from a year ago.
For months, employers have been suffering from a labor shortage, as many people who have lost their jobs in the pandemic have not returned to the workforce for a variety of reasons. But last month, nearly 600,000 people left bystanders looking for a job and were generally hired immediately. The government classifies people as unemployed only if they are actively seeking work.
As a result, the employment rate for Americans has risen from 61.6% to 61.8%, the largest increase since April. If that long-awaited development continues, it could point to stronger employment growth in the future.
Although the unemployment rate has been steadily declining this year, at least until this month, the percentage of Americans who are working or looking for a job has barely risen. The shortage of job seekers tends to limit employment and force businesses to pay more to attract and retain employees. Higher wages help maintain spending and growth. However, if prices are raised to offset the high labor costs companies often do, it can also contribute to inflation.
Whether the number of job seekers continues to grow is an important issue for the Federal Reserve. If the proportion of people in the workforce does not rise significantly, the Fed is approaching its goal of maximum employment.
Inflation is 30 years high, well above the Fed’s annual target of 2%, so meeting employment obligations will put more pressure on Chair Jerome Powell to raise interest rates sooner or later. .. Doing so will make the loan more expensive for many individuals and businesses.
President Joe Biden on Friday emphasized the decline in unemployment and called it “extraordinary progress.” Still, if employment growth continues to slow, it will be a challenge for Biden, who has been badly evaluated in a few polls on how he treated the economy.
Most indicators show that the economy continues to recover, but White House aides say the president hasn’t been credited with improving and instead burdens Americans in recent months. He personally expressed his dissatisfaction with facing criticism of the rising inflation and rising gas prices.
A government survey of businesses suggested that some employers were more cautious about employment last month. Restaurants, bars and hotels have increased employment by just 23,000 from 170,000 in October. This may reflect the impact of an increase in COVID-19 cases last month and a decrease in outdoor diet.
Retailers have cut 20,000 jobs. This shows that holiday employment was not as strong as it used to be. However, the transportation and warehousing company has added 50,000 positions. This shows that online retailers and shippers expect healthy online shopping.
Jeff Cribello, CEO of BBQ Holdings, which owns about 300 restaurants, said hiring has become a bit easier for him in recent months. His restaurant is not currently closed early due to lack of staff. But it’s still a struggle. The company hired more than 300 people in November, but still has about 500 jobs.
“The pandemic has revolutionized consumer behavior and demand, as well as workers’ desires,” said Crivello.
His company has raised the average hourly wage by 15% since the pandemic, but is competing with new opportunities for many restaurant workers, such as high-paying jobs in warehouses and trucks. According to Crivello, many young workers are finding jobs in the cannabis industry, games, and even on social media by increasing their followers and making money.
The work outlook for the coming months has become more ambiguous with the advent of Omicron variants. Little is known about Omicron, and widespread business closures are considered unlikely. Still, Omicron could discourage some Americans from traveling, shopping, and eating out in the coming months, slowing the economy.
As more people find jobs, the US unemployment rate drops to 4.2% | Chicago News
Source link As more people find jobs, the US unemployment rate drops to 4.2% | Chicago News