Soft November hirings disappoint, but jobs report holds other encouraging signs

The November jobs report from the U.S. Bureau of Labor Statistics (BLS) sent more mixed signals about the labor market, with nonfarm payrolls up by 210,000 during the month — a disappointing return compared to economists’ estimates of a gain closer to 550,000.

Weakness in hiring wasn’t concentrated to one employment sector, with several segments seeing soft growth last month. Leisure and hospitality jobs, for example, rose by only 23,000 in November. Health care employment grew by only 2,000. Retail trade, beset by worker scarcity and possibly impacted by the pulling forward of seasonal holiday hiring, lost 20,000 jobs, while government jobs backtracked by another 27,000.

Some sectors, such as professional and business services (which added 90,000 jobs), transportation and warehousing (up 50,000) and manufacturing (up 31,000) saw solid job growth, although it wasn’t enough to push the overall figure closer to that of forecasts.

Beneath the headline numbers, however, other signs point to continued progress. The unemployment rate fell by 0.4 percentage points to 4.2%, and the labor force grew by 594,000, pushing the participation rate to 61.4%. There are still 2.4 million fewer workers in the labor force since the start of the COVID-19 pandemic in February 2020, but in a market struggling to attract more workers, the tide seems to be shifting somewhat.

“Anyway you look at it, the job market continues to improve,” said Mike Fratantoni, senior vice president and chief economist for the Mortgage Bankers Association (MBA). “The headline nonfarm payroll gain of 210,000 jobs in November was smaller than anticipated. However, as has been the case several times this year, there are reasons to believe that this understates the improvement.

“Almost 6 million more people are employed compared to last November. There was an almost 800,000 monthly increase on an unadjusted basis, and the seasonal adjustment factors are less reliable given the volatility during the pandemic. Finally, the employment gauge from the household survey was up 1.1 million over the month.”

“It is also worth highlighting the steady gains in construction employment. More workers are needed to support the pickup in home construction MBA is forecasting in 2022.”


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