US hiring slows sharply to 245,000 jobs as virus intensifies

  • A man pushes carts as a hiring sign shows at a Jewel Osco grocery store in Deerfield, Ill., Thursday, April 23, 2020.

    A man pushes carts as a hiring sign shows at a Jewel Osco grocery store in Deerfield, Ill., Thursday, April 23, 2020. (AP Photo/Nam Y. Huh)

 
By CHRISTOPHER RUGABER
AP Economics Writer
Updated 12/4/2020 9:57 AM

WASHINGTON (AP) -- America's employers sharply scaled back their hiring last month as the viral pandemic accelerated across the country, adding 245,000 jobs, the fewest since April and the fifth straight monthly slowdown.

At the same time, the unemployment rate fell to a still-high 6.7%, from 6.9% in October as many people stopped looking for work and were no longer counted as unemployed, the Labor Department said. November's job gain was down from 610,000 in October.

 

Friday's report provided the latest evidence that the job market and economy are faltering in the face of a virus that has been shattering daily records for confirmed infections. Economic activity is likely to slow further with health officials warning against all but essential travel and states and cities limiting gatherings, restricting restaurant dining and reducing the hours and capacity of bars, stores and other businesses.

Most experts say the economy and job market won't be able to fully recover until the virus can be controlled with an effective and widely used vaccine. And the picture could worsen before it improves.

"The recovery is not insulated from the effects of the pandemic," said Daniel Zhao, senior economist at employment website Glassdoor. "This is the calm before the storm. We face a long and difficult winter ahead."

Before the pandemic, last month's job gain would have been considered healthy. But the U.S. economy is still nearly 10 million jobs below its pre-pandemic level, with a rising proportion of the unemployed describing their jobs as gone for good. Faster hiring is needed to ensure that people who were laid off during the pandemic recession can quickly get back to work.

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There is also evidence that the pandemic is inflicting long-term damage for millions of workers. People who have been out of work for six months or more -- one definition of long-term unemployment -- now make up nearly 40% of the jobless, the highest such proportion in nearly seven years. The long-term unemployed typically face a harder time finding work.

And the proportion of Americans who are either working or seeking work fell in November, suggesting that many people soured on their prospects for finding a job and stopped looking. That proportion declined to 61.5%, a level that before the pandemic haven't been seen since the 1970s.

The impacts of the slowdown aren't falling evenly on all Americans. Low-wage industries, like restaurants and bars and retail stores, actually cut jobs last month. And many mothers have been forced to stop working to take care of children that in school online.

The unemployment rates for Black and Latino workers fell much more last month than for whites. Still, the Black unemployment rate was 10.3% and for Latinos 8.4%, compared with 5.9% for whites.

                                                                                                                                                                                                                       
 

Friday's jobs report also reflects how the coronavirus has transformed the holiday shopping season. Transportation and warehousing firms added 145,000 jobs in November, more than half the total job gain for the month. That trend reflected rapid hiring by shipping and logistics firms that are benefiting from the surge in online purchases by consumers shopping at home. Retailers, by contrast, shed 35,000 jobs -- a reflection of fewer consumers shopping in physical stores.

The impact of the pandemic was particularly visible on a category that includes restaurants, bars and hotels. This group added just 31,000 jobs in November. That's only about one-tenth of the gains of the previous two months and suggests that the virus spread, new business restrictions and colder weather are forcing many businesses to closer their doors or limit hours.

Two enhanced federal unemployment benefits programs are set to expire at the end of December -- just as viral cases are surging and colder weather is shutting down outdoor dining and many public events. Unless Congress enacts another rescue aid package, more than 9 million unemployed people will be left without any jobless aid, state or federal, beginning after Christmas.

Friday's report coincides with renewed efforts in Congress to reach a deal on a new rescue aid package. A bipartisan group of senators has proposed a $900 billion plan that would include expanded unemployment benefits, more small business loans and aid to state and local governments. But there are no signs of any imminent agreement.

The gravest threat to the economy remains the raging virus, and most experts say any economic recovery depends on how fast an effective vaccine can be widely distributed and used. U.S. deaths from the coronavirus topped 2,800 Wednesday, a new high, with more than 100,000 Americans hospitalized with the disease, also a record, and new daily cases topping 200,000. In response, at least 12 states have imposed new restrictions on businesses in the past month, according to an Associated Press tally.

For now, there are signs that the economic recovery is stumbling. Consumer spending grew in October at the slowest pace in six months. Seated diners at restaurants are declining again, according to data from the reservations website OpenTable. And a Fed report on business conditions found that growth cooled last month in several Midwest regions and in the Fed's Philadelphia district.

Still, the full impact of the worsening pandemic may not be evident in Friday's jobs report, which measures hiring trends in the middle of the month. Some state restrictions weren't imposed until later in November. As a result, some economists say the worst consequences of the pandemic won't appear until the December jobs report is issued in early January.

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