The November jobs report has no silver lining. Americans need help — now.
Yes, it’s good that U.S. employers are still hiring. In a normal, healthy economy, adding 245,000 jobs would be nothing to sneeze at. But it’s not nearly enough for the economy today. We remain in a deep, deep hole, dug when employers eliminated 22 million jobs on net earlier this year. As a result, the U.S. economy still has a greater jobs deficit today than was the case at the very worst point of every previous postwar recession, including the Great Recession. Which no longer seems so terribly “great” anymore, as this chart illustrates:
As you can see, we’ve recovered only about half the positions lost when the pandemic initially broke out in the United States and shuttered much of the economy. If hiring continues at November’s pace, it will take more than three years before the United States regains all the jobs lost in early spring. And that estimate does not account for expected population growth, which would call for more jobs than we had pre-pandemic.
The report contains other bad news, too.
The headline unemployment rate fell because people dropped out of the labor force entirely — that is, they stopped actively looking for work — and therefore are no longer counted as unemployed. Meanwhile, the number and share of long-term unemployed are also rising. That’s a bad sign for at least two reasons. Research has shown that the longer people are out of work, the more difficult it is for them to find new jobs. Plus, one of the emergency federal aid programs created in the spring to grant workers more weeks of unemployment benefits is set to end the day after Christmas.
So why is the economy sputtering now? What accounts for the slowdown? A few factors are at play — and many of them were totally foreseeable.
First, coronavirus infections are spiraling out of control, consistently reaching daily record highs. That makes consumers, workers and business owners less likely to venture outside and engage in their normal economic activities.
Second, the lost jobs that were easiest to recover — the low-hanging fruit of hiring, if you will — were regained early on. Employers whose staff could work remotely have adapted. Businesses that saw new opportunities created by the pandemic seized them, and are continuing to do so. In fact, more than half of the job growth that occurred in November came from the transportation and warehousing sector — which has benefited from the number of people too scared to leave their homes.
Meanwhile, the industries that have the most difficulty operating in an out-of-control pandemic environment — those that require higher-risk, in-person interactions — are still struggling. Food services and drinking places (that is, restaurants and bars) lost another 17,000 jobs last month, in seasonally adjusted terms.
State and municipal governments are also in deep trouble, thanks to the budgetary problems imposed by covid-19 fallout. Local government education lost 21,000 jobs last month. Absent federal aid, more layoffs are expected in the months ahead. (Temporary decennial census workers were also let go, though that was always expected.)
With so many schools closed to in-person classes, and young children especially requiring supervision during weekdays, parents have struggled to hold on to their jobs. Women have borne the brunt of this problem. Below is a chart from an unpublished BLS table, showing non-seasonally-adjusted changes in parents’ employment since February. (Sample size for these survey results is small, so take the findings with a grain of salt.)
As I mentioned in my most recent column, there are plenty of other signs of persistent hardship, whose scale should be shocking in a country as rich as the United States. For instance, 12 percent of adults are in households that either sometimes or often didn’t have enough to eat in the previous week. And the outlook is dark: A third say they expect someone in their household to lose employment income in the next month. Meanwhile, a shrinking share of small businesses say they expect they’ll need to hire new employees in the coming months.
These numbers have been terrible for a while, yet Congress still hasn’t managed to come to a compromise and get more aid out the door. Let’s hope Friday’s report shocks lawmakers into action.
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