Restaurants, like this McDonald’s in Miami Beach, Florida, are big engines of job growth.
Joe Raedle / Getty Images
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Joe Raedle / Getty Images
Restaurants, like this McDonald’s in Miami Beach, Florida, are big engines of job growth.
Joe Raedle / Getty Images
Hiring slowed dramatically last month as Covid cases surged, even before the emergence of a new and even more worrisome coronavirus variant, which could put another acceleration on the road to recovery. labor market recovery.
Employers added just 210,000 jobs in November, according to monthly snapshot from the Ministry of Labor. Job growth appears to have lost momentum after stronger hiring in September and October. Employment figures for those months were revised upward.
However, a separate survey used to calculate the unemployment rate paints a different picture. It shows more than half a million people re-entered the workforce last month, while more than a million people have found work. The unemployment rate plummeted to 4.2%, from 4.6% in October.
Mixed signals show how unpredictable the labor market is in the pandemic economy. And the new variant adds to that uncertainty.
Health experts still don’t know how the omicron strain is transmitted or how effective the vaccine is against it. But the summer wave of deltas suggests a surge in infections could reduce both demand for workers and the number of people willing to work.
“We’ve seen in a very real way a slowdown in hiring due to delta variation,” said Nela Richardson, chief economist at payroll processing firm ADP. “There are fewer people going to restaurants. Fewer people traveling. And that has an impact on hiring. It could have an impact on fewer people deciding to return to the labor market.”
The US has so far recovered about 82% of the jobs lost during the pandemic. But the other 2.4 million people who left the workforce when the coronavirus hit have yet to return. It’s unclear when – or even if – they will.
“We all thought there was going to be a significant increase in the labor supply and that didn’t happen. So you ask, ‘Why?'” Federal Reserve Chairman Jerome Powell told a Senate Committee this week. “There’s a lot of uncertainty around that, but a big part of it is clearly related to the ongoing pandemic.”
Powell said he doesn’t expect the omicron variant to do as much damage to the job market as the first wave of the pandemic, in spring 2020. But it could prolong the recovery.
Many employers complain that they want to hire more people but don’t have enough applicants. Powell warned that prolonged labor shortages could exacerbate supply chain bottlenecks that have already pushed Inflation to the highest level in more than three decades.
Many observers now think the central bank may raise interest rates earlier than expected next year, in an attempt to keep prices up.
So far, the Fed has been willing to tolerate slightly higher inflation in hopes of boosting full employment. But as the recovery work drags on, Powell appears to be rethinking that balancing act.
“To get back to the kind of great labor market we had before the pandemic, we’re going to need a long-term expansion,” Powell said. “For that, we’re going to need price stability. And in a sense, the risk of prolonged high inflation is also a big risk to such a return to the labor market.”
Factories have strong demand, adding 31,000 workers in November.
“Manufacturing is powering through supply chains and labor supply issues,” says Richardson. “While we are seeing a slowdown in supplier deliveries that may hamper production, hiring remains solid.”
