BUSINESS US job gains stall in November as COVID-19 cases surge

BUSINESS

US job gains stall in November as COVID-19 cases surge

AFP

23:11, December 04, 2020

A man pushes carts as a hiring sign shows at a Jewel Osco grocery store in Deerfield, Ill., Thursday, April 23, 2020. (File photo: AP)

The US economy showed more signs the recovery is stalling as Covid-19 cases surge and more businesses are forced to close, adding a disappointing 245,000 new jobs in November, the government reported Friday.

And while the Labor Department data showed the unemployment rate dipped to 6.7 percent from 6.9 percent, the lowest since the pandemic struck, 10.7 million workers remain unemployed.

The ranks of long-term unemployed -- those jobless for 27 weeks or more -- increased by 385,000 to 3.9 million, and more Americans left the workforce entirely, the report said, as the participation rate dipped two-tenths to 61.5 percent.

The consensus estimate was for a gain of 650,000 positions last month, but many economists warned the result could come in much lower, given signs hiring had slowed as the coronavirus returned with a vengeance.

And economists warn the situation could worsen as Republicans and Democrats remains at odds over a relief package to replace the $2.2 trillion CARES Act passed in March. Many of the provisions of that measure have already expired and millions of workers are set to lose unemployment benefits just after Christmas.

Risk of more declines

Rubeela Farooqi of High Frequency Economics warned that "job growth is at risk of further, substantial deceleration from virus transmissions that will result in business closures."

"Until a vaccine can be safely and widely distributed, the labor market is likely to weaken, which will weigh on incomes and spending, and combined with missing fiscal support, will slow the pace of growth in the near term," she said in an analysis of the data.

With only a few weeks left in office, President Donald Trump said Thursday he would like to sign a new relief bill, although Republicans and Democrats appear to be far apart.

"I want it to happen. And I believe we are getting very close to a deal," Trump told reporters.

Gregory Daco of Oxford Economics said the CARES Act was a "critical lifeline" to the economy, and without additional aid conditions could deteriorate.

"We fear the next couple of months will prove difficult for the economy, with downside risks from the looming expiry of unemployment benefits for millions of Americans and the end of the eviction and foreclosure moratoriums," Daco said.

Democratic leaders in Congress have thrown their support behind a $908 billion bipartisan compromise proposal, at least as a starting point for discussions.

President-elect Joe Biden said Thursday that plan "would be a good start."

But "It's not enough," Biden said in a joint CNN interview with Vice President-elect Kamala Harris, adding that he would pursue further aid after he takes office on January 20.

"People are really hurting. They're scared to death."

Republican Senate Majority Leader Mitch McConnell continues to press for a much more limited plan of about $500 billion.

Frontline job losses

The pandemic impact was reflected in the loss of nearly 35,000 retail jobs last month, workers on the frontlines of the hardest hit sector, according to the new data.

As mostly lower wage positions fell victim to the pandemic, average hourly earnings rose slightly to $29.58.

Government employment fell by 99,000, largely due to layoffs of temporary census workers, while private hiring rose by 344,000, the report said.

Manufacturing and construction each added 27,000 and transportation and warehousing jumped 145,000.

The number of temporary layoffs dropped by 441,000 to 2.8 million, but that is 2.0 million higher than the pre-pandemic level.

Related Stories

Terms of Service & Privacy Policy

We have updated our privacy policy to comply with the latest laws and regulations. The updated policy explains the mechanism of how we collect and treat your personal data. You can learn more about the rights you have by reading our terms of service. Please read them carefully. By clicking AGREE, you indicate that you have read and agreed to our privacy policies

Agree and continue