Calm Before the Storm: November Jobs Report Demonstrates Sluggish Growth

• Author: Bryan Miller
• Posted: 2024-03-06

The November jobs report was not what economists were expecting — there was no gold pot at the end of the rainbow. Economists had hoped the economy would have added over 500,000 jobs. Instead, American employers only added 245,000 workers to the payroll. November was the fourth month for jobs tapering off during the pandemic.

Presently, 9.8 million Americans remain unemployed. This is in addition to the self-employed and the gig workers. The October jobs report was revised downward from 638,000 to 610,000.

Unfortunately, joblessness remains escalated with the minority population being hit the hardest. It appears that November offers an insider view that temporarily unemployed people are now experiencing long-term unemployment.

The Real Unemployment Rate

The unemployment rate dropped from 6.9% to 6.7% in November. The economy previously enjoyed a low unemployment rate of 3.5% pre-pandemic. These figures do not explain the entire story. Many people have dropped out of the labor force and are not eagerly seeking full-time employment.

Many school districts haven’t reopened. Parents must educate their young children at home which hinders their ability to enter the workforce.

Additionally, the November jobs report was exacerbated because 93,000 U.S.A. Census Bureau workers, who were no longer needed to finalize the headcount, were laid-off from their employment.

Most workers have returned to their jobs since the pandemic began to rage in March. Nevertheless, the economy has not recovered the 10 million jobs that have been lost since February 2020.

Pandemic Unemployment Assistance

The economic cliff is coming soon. The government unemployment assistance programs come to an end on December 26, 2020, right after Christmas. This could leave 12 million people out in the cold, unable to pay for mortgages, groceries, and childcare without PUA and PEUC.

Congress is diligently working to extend the programs for another four months into 2021 with a $908 billion stimulus package. Americans would have more time to search for employment, considering the coming vaccines. Hopefully, most of America would be vaccinated by the latter half of 2021. That way, the economy could fully recover.

Ernie Tedeschi

Ernie Tedeschi, an economist at Evercore ISI accounting firm, said that the economy is in a precarious position. “Far off in the distance, there is sunlight.” The next few months are going to be tough. There may be lots of scars to heal, but we will get through it.

COVID-19 and the weather will affect several industries. Because of indoor air circulation, diners had to eat outside. Since COVID cases have escalated, cities have gone into lockdown, and restaurants had to close shop. Because fewer people are traveling, hotels had to close their doors.

Southwest Airlines

The CEO of Southwest Airlines said he would not furlough any employees — instead, he reduced employees’ salaries.

Southwest Airlines was able to weather the pandemic since they do not have many international flights. Most of their flights are to the Americas.

Possibly, this may change next year. The CEO stated he might have to furlough employees during the first part of 2021.

The Minority Wealth Gap

Black Americans and people of color are more likely to be unemployed in higher numbers than Asian and White Americans. Most of these workers are employed in the hardest-hit industries like leisure and hospitality.

The Black American unemployment rate is 10.3%, while the White American unemployment rate is 5.9%, and the Asian American unemployment rate is 6.7%. The fact remains that a lot must be done to address the racial wealth gap.

Long-term Unemployment

The labor force is shrinking faster than expected. In November alone, the labor force shrank by 400,000 people. The labor participation rate fell from 61.9% to 61.5%. Besides childcare concerns, workers are leaving the workforce because of their health risks of contracting COVID-19 and lack of jobs.

People who have been out of work for more than six months are the long-term unemployed. In November, the long-term unemployed grew by 385,000 people. The total for the long-term unemployed now numbers 3.9 million people. This accounts for 37% of the unemployed, most people ever since the Great Recession when long-term unemployment peaked at 45% in April 2010.

Long-term unemployment is a ticking time bomb, said Daniel Zhao, an economist for Glassdoor. Fewer people are available for work. The longer a worker remains unemployed, it is much harder to find suitable employment. Those on regular state unemployment aid exhaust their benefits after six months.

By 2021, economists expect a modest recovery. It could take an additional two to three years for the leisure and hospitality industries to recover.