The November jobs report released Friday was disappointing. But the big picture situation is far more complicated. Bureau of Labor Statistics figures show the U.S. added less than half the number of jobs anticipated, just 210,000 compared to the 550,000 observers predicted. But the unemployment rate dropped from 4.6% to a pandemic low of 4.2% as 1.1 million Americans reported finding work in the last month.
“That’s good news for job seekers and workers, and for businesses too,” Julia Pollak, chief economist at ZipRecruiter, told the Associated Press. “It looks like the supply constraints are easing a bit with the unemployment rate low and wage growth high.”
Wall Street didn’t like the November jobs report, with stocks falling quickly after it came out. The Dow Jones Industrial Average fell 400 points after the news, with the S&P 500 and Nasdaq taking similar dips.
The hospitality industry (bars, restaurants, hotels) added just 23,000 jobs last month, a sign the most recent COVID wave kept people at home. This worrying trend might continue as the reaction to the discovery of the omicron variant has dampened hopes of a travel and hospitality boom. At least for now, however, the economy is expected to show growth at a brisk 7% clip over the final quarter of 2021 after an annual growth rate of just 2.1% in the third quarter.
While official unemployment numbers look good, there were more than 12 million people in the November jobs report who said they have been unemployed for more than six months (2.2 million), are working only part-time because of economic reasons, or want a job but aren’t actively seeking work (5.9 million).
Further muddying the picture is that disappointing jobs reports from the summer were later revised upward as more data came in, showing more jobs added than were originally reported. That will probably happen again with the November jobs report.
“My sense is the household estimate is closer to the truth around what is happening in the jobs market and … should anticipate a significant upward revision to the November data next month,” Joseph Brusuelas, an economist at RSM, a tax and advisory firm, tweeted.