A new report has indicated that job growth in the US has slowed down as the country faced a new surge of coronavirus cases.
According to the US Department of Labor, employers added just 245,000 jobs for the month of November as the nation battled a dramatic increase in coronavirus infections. This number is below forecasts by economists.
Data from Johns Hopkins University show that currently, coronavirus cases in the US have surpassed 14 million, with more than 274,000 fatalities.
New jobs and unemployment rate in the US
Meanwhile, the report also indicated that the country’s unemployment rate has fallen from 6.9% in October to 6.7% in November, partly attributed to numerous people deciding to stop looking for work.
The Labor Department mentioned that although the US has recovered around half of the jobs lost due to the lockdowns, approximately 10.7 million people still remain unemployed, of which almost 40% of whom have been unemployed for over six months
The report also revealed that an additional 7.1 million people would like a job but do not count as unemployed because they have given up looking for work.
In October, the Bureau of Labor Statistics’ monthly jobs report indicated that 638,000 jobs were added in October but the US is still down approximately 10 million jobs since the onset of the coronavirus pandemic in February.
The drop in unemployment rate was also bigger during that month, going down from 7.9% in September to 6.9% in October. The rate drop beat economists’ consensus estimate of 7.7% for the month.
The decline was a result of numerous workers returning to their jobs, as demonstrated by a decrease in the number of people on temporary layoff, and slight change in the number of permanently unemployed workers.
Andrew Hunter, senior US economist at Capital Economics, argued that this was a sign that the longer-term impact of the pandemic may not be as severe as expected.
On the other hand, the number of unemployed people classified as permanently losing their old jobs amidst the coronavirus pandemic increased by 345,000 in September to a seven-year high of 3.8 million.
The numbers demonstrate that many of what were initially hoped as furloughs or temporary job losses have become permanent as businesses closed down and take cost cutting measures.
Prior to the onset of the pandemic, this number was at a 19-year low in February. The closely monitored labor market measure has almost tripled since then.
Austan Goolsbee, former economic adviser to President Obama, commented: “It’s an ominous sign.”
Outlook for the labor market
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: “The bottom line is that job growth has slowed markedly, and this report demonstrates yet again that it’s not possible to separate the economy from the virus. We hope these numbers will increase the pressure on Congress to act.”
A recent Century Foundation report stated that approximately 12 million people are expected to lose access to unemployment benefits at the end of December unless lawmakers approve additional stimulus.
Andrew Stettner, a senior fellow at Century Foundation, pointed out: “For Congress to allow this many workers to be cut off… it’s unprecedented.”