The US added just 210,000 jobs in November, seriously underperforming analyst expectations amid concerns that the Omicron variant of the coronavirus could put recent gains at risk, the feds said Friday.
Analysts surveyed by the Wall Street Journal had expected a far higher gain of 573,000 jobs in November following 531,000 jobs being added in October.
“Payroll gains clearly disappointed, coming in significantly below expectations,” said Bankrate senior economic analyst Mark Hamrick.
But despite November’s worse-than-expected payroll numbers, the unemployment rate for the month dropped more than anticipated. It stood at 4.2 percent, compared to 4.6 percent in October and 3.5 percent in February 2020 before COVID-19 shutdowns.
Hamrick said the drop in the unemployment rate is encouraging, writing that “more progress has been made on this front than was expected a year or so ago.”
Biden briefly addressed the report in a Friday morning press conference, calling the drop in the unemployment rate “incredible news.”
“America is back to work and our jobs recovery is very strong,” insisted Biden, who spoke in a hoarse voice he attributed to a cold.
The jobs report also shows that average wages surged 4.8 percent from the same time last year as workers benefited from the tight labor market. The labor force participation rate also ticked up from 61.6 percent in October to 61.8 percent in November.
S&P 500 futures rose about 0.5 percent on the news.
However, despite the holiday season shopping rush, retail employment declined by about 20,000 in November, the report shows. 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 reduce hiring by employers. Now, some worry that the Omicron variant — which was detected in New York this week — could do the same in December and the new year.
“Concern about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” Federal Reserve Chairman Jerome Powell told Congress on Tuesday.
Nonetheless, the Fed is expected to soon wind down its bond-buying program and potentially hike rates next year amid concerns about skyrocketing inflation. Biden said Friday that his administration was taking steps to fight inflation and that gas prices are set to decline in the coming weeks.
Friday’s jobs report comes after recent encouraging jobless benefits figures. On Thursday, the Labor Department revealed that 222,000 people had filed for unemployment benefits ahead of the Thanksgiving holiday — a modest jump from the previous week but still near low pre-pandemic levels.