The jobs report released December 4, 2020 shows a dramatic slowdown in private sector job gains, from 1.028M, 930K, and 877K net gains in August, September and October, respectively, to just 344K in November.
The weak report reflects the weather cooling, Covid surging, and fiscal support for the economy waning. It also reflects an unusual holiday season in which seasonal hiring has been lower than usual and concentrated in different industries amid a dramatic decline in tourism and foot traffic. Here are three key takeaways:
Pandemic Surge Pauses Recovery in Restaurants and Retail
Restaurants and bars lost 17K jobs and are likely to lose more in December, given the recent return of lockdown measures in several cities and states. The retail sector also registered a 38K decline—although that was mostly the result of seasonal adjustments. The industry actually added 302K workers between October and November, but that is usually a period in which it adds far more (432K jobs in 2019 and 482K in 2018, respectively).
E-Commerce-Related Employment Soars
The apparent decline in traditional retail was more than offset by gains in e-commerce-related jobs. Couriers and messengers (81.9K) and warehousing and storage (36.8K) posted large gains. Nonetheless, the November surge in employment was still substantially smaller than usual. Seasonally unadjusted figures show a gain of 520K private sector jobs overall—9% fewer than in the same month last year.
Labor Force Participation Ticks Downwards
Although the unemployment rate fell from 6.9% to 6.7%, it did so for the wrong reasons. Some Americans gave up looking for work. The number of adults not in the labor force—neither working nor actively seeking work—rose by 560,000, as the labor force participation rate fell by 0.2 percentage points.
The disappointing jobs report has intensified pressure on Congress to reach a deal in its latest round of negotiations on an economic relief bill. Thanks to highly effective vaccines, an end to the pandemic is now in sight. But the so-called Covid cliff—the expiration of various CARES Act relief measures—will be here at the end of December, well before vaccination efforts become widespread. Thousands of businesses and millions of jobless Americans are eager for Congress to provide relief that can help tide them over.