Economy adds disappointing 245,000 jobs in November while COVID-19 rages across country

Paul Davidson, USA TODAY
·6 min read

U.S. employers added a disappointing 245,000 jobs in November amid a surge in COVID-19 cases and more state business constraints as well as the looming halt of extended jobless benefits and other federal lifelines for millions of Americans.

The unemployment rate, which is calculated from a different survey, fell to 6.7% from 6.9% but that was because the number of people working or looking for jobs fell by 400,000, the Labor Department said Friday.

Economists surveyed by Bloomberg had estimated that 486,000 jobs were added last month.

Job gains have slowed for five straight months since peaking at 4.8 million in June and the downshift was particularly sharp last month following 610,000 payroll additions in October.

The nation has recovered 56% of the 22.2 million jobs wiped out in the health crisis as states have reopened restaurants, shops and other businesses shuttered by the outbreak, and brought back many furloughed workers. Some perspective: Monthly job gains averaged 178,000 last year.

But the rehiring has been offset by a resurgent virus across most of the country that's sparking renewed restrictions on businesses and hundreds of thousands of layoffs. This week, the nation’s one-day death toll passed 3,000 and hospitalizations topped 100,000, both unprecedented nadirs in the crisis. California announced a new stay-at-home order Thursday and states such as Illinois, Michigan and Louisiana have imposed new curbs on restaurants, gyms and other outlets. Hiring in leisure and hospitality, which includes restaurants and bars, slowed substantially in November after leading the jobs recovery for months as eateries reopened.

The number of businesses open and employees working fell sharply last month, according to Homebase, which provides employee scheduling software.

Partly as a result, clawing back the remaining 9.8 million jobs shed during the outbreak could take several years, economists say. More temporary job losses are becoming permanent. Many businesses are downsizing or closing for good. Sectors such as business travel and event planning could be diminished for years to come.

Last month, the number of Americans on temporary layoff fell by 441,000 million to 2.8 million as furloughed workers were rehired. About a quarter of unemployed workers said they were on temporary layoff, down from a third the previous month. That means many workers could still be brought back to their old jobs but the number is shrinking.

The ranks of workers permanently laid roughly held steady at 3.7 million.

“There’s been a little bit of a pause” in hiring in November because of the surge in coronavirus cases, says Jim McCoy, senior vice president at ManpowerGroup, a leading staffing agency.

A vaccine is expected to be widely available by spring, heralding an improved outlook for the economy and hiring, but several dark months lay ahead, economists say.

"Until a vaccine can be safely and widely distributed, the labor market is likely to weaken, which will weigh on incomes and spending," economist Rubeela Farooqi of High Frequency Economics wrote in a note to clients.

Several other factors also crimped job gains last month. Another 93,000 temporary workers for the 2020 Census were cut, and state and local government payrolls fell by 13,000, with local education dropping by 21,000 amid school closures. Putting aside the government job losses, the private sector added a somewhat healthier 344,000 jobs.

A drop in retail traffic due to the pandemic reduced retail hiring for the holidays, leading to a loss of 35,000 jobs on a seasonally adjusted basis. That was partly offset by stepped-up job gains in trucking, warehousing and delivery, a jump that Goldman Sachs attributed to much stronger online spending.

Meanwhile, extended jobless benefits for unemployed Americans who have exhausted their initial 26 weeks or so and a national moratorium on evictions, among other federal assistance, are set to expire at the end of the month. That could further batter hiring as consumer spending slows and the economy faces the risk of toppling into its second recession since February.

Congress has been deadlocked for months over a new relief package that could avoid such a fate, but key lawmakers this week voiced optimism about reaching a deal on a roughly $1 trillion measure before the holidays.

'Now what?'

After A.J. Holley, 40, of Atlanta, was furloughed from her manager job at a buffet-style chain restaurant in March, she waited nearly two months before receiving unemployment benefits because of the crush of applications. In the meantime, she cashed out most of her 401(k) and other investments to pay the bills, and cut organic and other pricey foods from her grocery budget. She’s also going without health insurance.

By May, the unemployment checks, including the $600 weekly federal bonus and state benefits of about $400, had arrived, nearly matching her salary, though the restaurant chain, called Sweet Tomatoes, permanently closed.

Even after the $600 federal bonus was halted in late July, Holley and her 19-year-old daughter have scraped by on the state benefits, the little savings she had left and about $1,700 in federal lump-sum payments after President Trump reinstated half the federal supplement.

Now, however, that money is gone. Holley this week needed a $500 donation from her church to help pay the $1,240 rent for her two-bedroom apartment. And she has modified a personal loan.

“I’m literally budgeting everything down to the penny,” she says.

With her jobless benefits set to expire at year-end without congressional action, Holley asks, “Now what?”

“I kind of feel like so many working families. I do the right thing. I find I’m in this situation but the government is failing to do what it should do. That upsets me.”

Holley says she can probably pay her bills in January with assistance from the church but then would have to move in with her father – a worrisome prospect since he’s in his 70s and more vulnerable to COVID-19.

“I’m a woman of faith,” she says. “I’m going to find a way to make it work.”

Industries that are hiring

Transportation and warehousing led the payroll gains with 145,000 as online fulfillment and delivery services staffed up for the holidays. Professional and business added 60,000 jobs and health care, 46,000.

Construction added 27,000 jobs amid a booming housing sector and favorable weather last month. Manufacturing also added 27,000 as the industry continued to recover due to a surge in business investment and consumer spending on appliances and other goods.

Labor force participation falls

The share of Americans working or looking for jobs fell to 61.5% from 61.7%, mostly reversing the prior month’s fall. The figure is among the lowest since the mid-1970s.

Many people dropped out of the labor force to care for sick relatives or children who are distance-learning from home. But economist Michael Pearce of Capital Economics says the decline also “is a worrisome sign the unemployed are giving up looking for work.”

Many businesses are reopening amid the COVID-19 pandemic while others have been hit by new restrictions.
Many businesses are reopening amid the COVID-19 pandemic while others have been hit by new restrictions.

This article originally appeared on USA TODAY: Jobs near me: 245,000 positions added in November as coronavirus pandemic surged