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U.S. Jobs Growth Slowed Sharply in November: NFP +210k vs +550k Expected

Economic IndicatorsDec 03, 2021 08:34AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- The U.S. labor market lost momentum significantly in November, defying expectations for another strong month of job gains. 

The Labor Department said nonfarm employment rose by only 210,000 through the middle of the month, down from 546,000 in October. The latter figure was revised up by 15,000 from its original estimate, but didn't come close to offsetting the disappointment of the November number, which was over 300,000 short of a consensus forecast of 550,000. Expectations for a strong report had hardened after payrolls processor ADP had said on Wednesday that the private sector had added 534,000 jobs in the month, by its calculations. There has also been little to suggest a weakening in labor market in other data, with the monthly Job Openings survey continuing to show near-record levels of vacancies. 

Despite the big shortfall in job creation, the unemployment rate fell by more than expected to 4.2% of the workforce from 4.6% in October. That reflected an increase in labor force participation, which rose to 61.8% of the adult population, from 61.6% in October. The participation rate, which has been a particular problem holding back the economic recovery this year, is now at its highest since March last year.

"Notable job gains occurred in professional and business services, transportation and warehousing, construction, and manufacturing," the Bureau of Labor Statistics said, adding that employment in the retail trade actually declined in the month leading up to the Thanksgiving holiday.

The expansion of the labor force should, all other things being equal, take the steam out of some of the inflationary pressure that has built over the last year, in an environment of sustained high spending despite increasing supply-side constraints and bottlenecks. Federal Reserve Chairman Jerome Powell acknowledged earlier this week that inflation was likely to remain higher for longer than at first estimated, largely due to such supply-side issues. 

However, all other things appear increasingly unlikely to stay equal in the near term, given the emergence of a new and seemingly more infectious strain of Covid-19 over the last week. The Omicron strain is now spreading rapidly through South Africa, the first country where it was detected, and has already been identified in more than two dozen countries across the world. Much of Europe has already announced a fresh wave of mobility and social distancing restrictions, with Germany - Europe's largest economy - effectively locking down unvaccinated adults in a suite of new measures prepared by the new government. U.S. President Joe Biden has announced the tightening of testing requirements on people arriving in the U.S. It is unclear that that will be enough to stop Omicron from spreading in the community.

"Labor supply simply isn't returning quickly enough and, for companies desperate to hire, this is a huge problem," said ING chief international economist James Knightley in a note to clients.   "The implication is that it constrains growth and pay is bid higher, with those cost increases likely passed onto consumers."

He noted that the discrepancy between what employers were saying and what households were saying (the household survey of employment rose by over 1 million) made it hard to interpret the numbers cleanly. 

"Effectively you can defend any position by picking out the bits of the report that suits your view," Knightley said.

U.S. Jobs Growth Slowed Sharply in November: NFP +210k vs +550k Expected
 

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Comments (16)
Andrew Ho
Andrew Ho Dec 03, 2021 10:30AM ET
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good news
farid aziz
farid aziz Dec 03, 2021 9:42AM ET
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Thought so lmao.
Rob Chan
Rob Chan Dec 03, 2021 9:29AM ET
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Oh yeah, let the pre market manipulation begin. now we have 3 people with new strain of covid, and no one has job or money.... what about the huge money released in market and inflation touching sky. Home market sky rocket with unreasonable prices. Unemployed people are buying those correct ?
Akposiegbe Kelvin
Akposiegbe Kelvin Dec 03, 2021 9:29AM ET
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💯
Sica Anghel
Sica Anghel Dec 03, 2021 9:29AM ET
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ceau
Nguyên Läc
Nguyên Läc Dec 03, 2021 9:24AM ET
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€23.282.800
Mitchel Pioneer
Mitchel Pioneer Dec 03, 2021 9:16AM ET
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Ah yes, let the pre-market FRAUD begin.  Can't have 2 consecutive losses, but we can have consecutive days of "gains" in the biggest investment JOKE in history.  Can't have the laughingstock of the investing world go too long without a "record high."  Keep assuming the proper position America, as Wall Street prepares to send the US working class into another weekend with a financial knife in their back.
John Avenetti
John Avenetti Dec 03, 2021 9:16AM ET
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don't forget the covid scamdemic
matthew panos
matthew panos Dec 03, 2021 9:12AM ET
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Nothing to trust in mainstream news. Our hospital recently admitted that Covid deaths are base on whether the person had Covid at death, NOT whether it was the main cause of death! Such a scam!
Robert Cox
Robert Cox Dec 03, 2021 9:12AM ET
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So in your world, if a person with a compromised immune system dies after catching a cold, did they die of a cold or of a compromised immune system? One wouldn't happen without the other.
Franco Dominguez
Franco Dominguez Dec 03, 2021 9:08AM ET
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only 200k w trillions of dollies expended on stimula, really!!!
John Berry
John Berry Dec 03, 2021 8:56AM ET
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This whole market is a scam
James Pattison
James Pattison Dec 03, 2021 8:54AM ET
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Democrats are succeeding at cresting a permanent underclass… they need this because then they can come save them… and have their base forever…
Mahzullah Rahımı
Mahzullah Rahımı Dec 03, 2021 8:54AM ET
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mua
Nick Burns
Nick Burns Dec 03, 2021 8:53AM ET
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yet unemployment is down to 4.2% from 4.6% last month so maybe new employment isn't as great as they'd like it but still doesn't mean we are losing momentum just means we didn't go as fast as someone would like ... money is still being spent yes people pay more which means companies make more which they can use to pay employees more yes inflation blah blah blah it's not ****the economy just changing the stickers on the price ...it's a game people
Empire Destroyer
Empire Destroyer Dec 03, 2021 8:53AM ET
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The estimation was so stupid, you'd think they estimated so high to give impression of bearish. Last week report was a one off high so why would this week be just as high... there "economists" need to quit and let real data scientists do the predictions
Franco Dominguez
Franco Dominguez Dec 03, 2021 8:53AM ET
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fast as someone??? NUMBER ONE economy isnt growing fast even trillions of dollies throwing to trash
Shane Weddle
Shane Weddle Dec 03, 2021 8:53AM ET
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Whats tue labor force participation rate?
Craig Garrett
Craig Garrett Dec 03, 2021 8:49AM ET
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An absolute trainwreck of a jobs report comes out, and the market goes up. What a Ponzi scheme!
New Jazenevd
New Jazenevd Dec 03, 2021 8:49AM ET
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Weak economy means more stimulus, aka money printing. This is good for stocks.
Peter ONeill
Peter ONeill Dec 03, 2021 8:49AM ET
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New Jazenevd  0 chance there will be more stimulus after $7 Trillion thrown in already (more than the whole cumulative US debt up to 2000). Be like throwing a grenade in after already setting your own house on fire Re Inflation. Stocks are increasing as hedge funds are betting Fed might delay Tapering a bit longer if unemployment is still an issue. But Unemployment isn't an issue - lots of jobs out there - people just do not want to work or will only work if offered huge wage increases (which will only harden inflation increases even further)
New Jazenevd
New Jazenevd Dec 03, 2021 8:49AM ET
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Peter ONeill  Money printing will continue, no matter how you call it, stimulus or whatever.
Dave Jones
Dave Jones Dec 03, 2021 8:46AM ET
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yay! more stimmy! everything is awesome!
Sica Anghel
Sica Anghel Dec 03, 2021 8:46AM ET
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Tyrone Jackson
Tyrone Jackson Dec 03, 2021 8:43AM ET
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Told you no one is hiring Only Walmart and the big retailer is hiring for the holiday business- The 100k jobs are all gone. You voters liberals- Democrats and this is exactly what you get- Inflation and the F 500 companies put a freeze on hiring. And your 100% increase in gas/ energy prices. Lol And the high crime rates What did you expect?? Tools
Thanos theBear
Thanos theBear Dec 03, 2021 8:43AM ET
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talking about a disaster.
cosmic osmosis
cosmic osmosis Dec 03, 2021 8:43AM ET
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Hey, I've got a brilliant idea...how about we defund the police?
Peter ONeill
Peter ONeill Dec 03, 2021 8:43AM ET
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Loads of hiring. People just do not want to work as scared, comfy on state handouts or will only work if offered huge salary increases. Go onto any job board and literally 100,000's of jobs.
New Jazenevd
New Jazenevd Dec 03, 2021 8:38AM ET
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Biden’s stagflation is coming. Carter the Second.
David Vaughan
David Vaughan Dec 03, 2021 8:37AM ET
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-markets rise anyways-
 
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