Further Slowdown in Job Creation Sets Off Economic Alarms
The American job engine has slowed significantly, stranding millions who have yet to find work after being idled by the pandemic, and offering fresh evidence that the recovery is faltering.The Labor Department reported Friday that employers added 245,000 jobs in November, fewer than half the number created in October. The pace of hiring has now diminished for five straight months.While many of those knocked out of a job early in the pandemic have been rehired, there are roughly 10 million fewer jobs than there were in February. Many of the unemployed are weeks away from losing benefits that have sustained them, with emergency assistance approved by Congress last spring set to expire at the end of the year.The latest sign of economic headwinds arrived as members of Congress struggled to reach agreement on a new aid package. A bipartisan group of legislators has put forward a $900 billion proposal, and the House speaker, Nancy Pelosi, said the disappointing jobs report should add momentum to negotiations.President-elect Joseph R. Biden Jr., warning of “a dark winter,” emphasized the urgency of congressional action. “This is a grim jobs report,” he said in a statement. “It shows an economy that is stalling. It confirms we remain in the midst of one of the worst economic and jobs crises in modern history.”Covid-19 caseloads have doubled in the past month and are expected to rise further, discouraging people from in-store shopping and leading to new restrictions. And in much of the country, colder weather is likely to impede outdoor dining, which many restaurants have depended on.“We’re in an unusual position right now in the economy,” said Ernie Tedeschi, an economist at the accounting firm Evercore ISI. “Far off in the distance there is sunlight” because of progress on coronavirus vaccines, he said, but until then, “we’re going to have a few of the toughest months of this pandemic, and there will be a lot of scars left to heal.”One of the longer-lasting wounds is likely to be a large pool of people — many still of prime working age — who drop out of the labor force, remaining sidelined even when opportunities return.The share of those 16 or older who are in a job or actively seeking one fell in November to 61.5 percent and remains far below levels seen before the pandemic. The drop has been especially noticeable among women, who are heavily represented in the service industries hit hardest by the pandemic — like retailing and dining — and have been more likely to leave the labor market because of family responsibilities.The seasonally adjusted jobless rate dipped in November, to 6.7 percent from 6.9 percent, but that was primarily because more people gave up looking for work.“Temporary unemployment fell, but permanent job loss inched up,” said Jed Kolko, chief economist at the job search site Indeed. Easily won gains have already occurred, as employers recalled briefly displaced workers, making subsequent progress harder.“Measures of longer-term damage worsened slightly in November,” he said.Last month’s job totals were dragged down in part by the loss of 93,000 temporary census workers, unneeded now that the official counting has wound down.Yet even in the private sector, “momentum is slowing,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics.While distress can be found in nearly every pocket of the labor market, the pain has been unevenly distributed. This downturn, like previous ones, is expected to widen wealth and income gaps and hurt people with the least education.Joblessness among Black and Hispanic workers was significantly higher last month than it was for whites, in part because they hold a disproportionate share of service jobs.Gabriela Villagomez-Morales, 36, was laid off from her position as an assistant teacher at a day care center in Tacoma, Wash., after the pandemic arrived in March and schools shut down.Ms. Villagomez-Morales, a single mother of four, was unable to pay the $1,000 rent for her house, so she packed up and moved in with her sister and her two children.She has applied for jobs at restaurants and child care centers. Although she has yet to find work, she worries what will happen to her children if she does.“It would be difficult, because someone would have to watch my kids if I’m not at home,” Ms. Villagomez-Morales said. “Child care is really expensive.”There have been some signs of energy in the labor market. With the pandemic keeping shoppers out of stores and employees working from home, it’s no surprise that some of November’s biggest gains were in warehousing and moving goods and in health care jobs.Employers in business and professional services also continued hiring, although large sections of the economy — like hospitality, travel and entertainment — are still floundering.Becky Frankiewicz, president of the staffing and placement company ManpowerGroup North America, said a survey of all publicly posted jobs showed 11 million openings in November, a million more than the previous month.“We continue to see week-over-week job growth,” Ms. Frankiewicz said. “We’re nowhere near where we were, yet we continue to limp ahead with recovery.”There has been seasonal hiring, but the composition is different from what it was in previous years. Instead of adding positions at cash registers, on sales floors and in call centers, employers are scooping up people to work in warehouses and to handle customer service calls from home.“We’ve placed several thousand associates last week for seasonal holiday push, and there are a lot of openings for work-from-home opportunities,” said Amy Glaser, senior vice president at the staffing firm Adecco.Ilias Simpson, the chief executive of Radial, which handles e-commerce operations for retailers and other businesses, said the company had hired 15,000 seasonal workers, nearly tripling its North American work force for the holidays.“We’ve been hiring since October,” Mr. Simpson said, noting that Radial expected to hire 40 percent more people than it did last year. “We’re in the middle of peak season.”He plans to add several thousand workers over the next six months, some in permanent positions.Last year, when the unemployment rate had settled below 4 percent, news that employers had added nearly a quarter of million people to payrolls in a single month would have been greeted with enthusiasm. But circumstances have changed radically in a short time.Now millions more people are unemployed. And the broadest measure of joblessness, which includes workers who have part-time work but would prefer full-time employment or have given up the job hunt, has been at 12 percent for two months.If job creation doesn’t pick up, it will take more than three years to get back to where the labor market was before the pandemic hit.Wendi Wilson, 54, has been out of work since March. She had worked for six years as a brand ambassador helping companies sell products at conferences on the Las Vegas Strip, making roughly $35,000 a year.Her state unemployment benefit amounted to $115 a week, which was augmented for a while by a $600 federal supplement before it ran out in the summer.That left Ms. Wilson struggling to pay the $1,170 rent for her two-bedroom apartment in Summerlin, Nev., and a $460 monthly car payment.In August, her unemployment benefits stopped, but she said she hadn’t been able to reach the unemployment office to get the extension she is entitled to. So Ms. Wilson has been using her savings to pay bills, including cashing in her retirement account. She is also relying on donations from friends.“I don’t have any savings left, and that’s scary to me because of my age,” she said. “I’m not used to having to depend on others to help me, and I don’t like it.”Gillian Friedman and Jeanna Smialek contributed reporting.