The U.S. economy likely added back the smallest number of jobs in seven months in November, as the labor market endured mounting pressure from the coronavirus pandemic while businesses wait for a vaccine to be distributed next year.
The U.S. Department of Labor is set to release its monthly jobs report Friday morning at 8:30 a.m. ET. Here were the main results expected from the report, compared to Bloomberg consensus data as of Thursday morning:
Change in non-farm payrolls: +475,000 expected, +638,000 in October
Change in private payrolls: +545,000 expected vs. +906,000 in October
Unemployment rate: 6.8% expected, 6.9% in October
Average Hourly Earnings month-over-month: +0.1% expected, +0.1% in October
Average Hourly Earnings year-over-year: +4.2% expected, +4.5% in October
During November, a plethora of new stay-in-place measures and curfews swept the nation as COVID-19 cases, hospitalizations and deaths swelled to record levels. These renewed restrictions likely weighed on the rate of the recovery in the labor market, which had already been slowing after a record surge in rehiring followed the initial wave of lockdowns in the spring.
“We believe the slowdown in private NFP [non-farm payrolls] will be driven by a combination of seasonal distortions, changes to behavior due to COVID-19 and slowing rehiring activity,” Lewis Alexander, chief U.S. economist for Nomura, said in a note Thursday. “For government employment, we expect a 130k decline, driven by another large decline in temporary Census workers and continued softness for state and local education employment.”
November’s unemployment rate is also expected to have improved just marginally. The jobless rate likely fell to 6.8%, from the 6.9% reported in October. While down from a pandemic-era high of 14.7% in April, the jobless rate remains nearly double that from before the pandemic.
Other employment reports this week underscored the decelerating trend. Private-sector hiring fell to the lowest level in four months in November, according to data tracked by ADP. New weekly jobless claims began rising again around the 12th of the month, when the Labor Department conducts its surveys for its monthly jobs report. And in the Federal Reserve’s November Beige Book, the central bank noted that nearly all districts reported rising employment, “but for most, the pace was slow, at best, and the recovery remained incomplete.”
The U.S. economy still has a ways to go before fully making up for the drop in payrolls induced by the pandemic. Even with another nearly half-million jobs expected to have come back in November, the economy would still be about 9.6 million jobs short of its pre-pandemic level in February. The U.S. economy lost more than 22 million jobs between March and April.
And worryingly, the number of the long-term unemployed has kept climbing. Those classified as “permanent job losers” totaled 3.7 million in October, eclipsing the number of individuals on temporary layoff for the first time since the start of the pandemic. Permanent job losers have increased by 2.4 million since February, before the pandemic meaningfully hit the U.S. economy.
In Washington, congressional lawmakers have for months been at a stalemate over the size and scope of another stimulus package, which could help provide funds for businesses to help keep workers employed, and offer extended unemployment benefits for those the pandemic has kept out of work. Federal unemployment programs authorized under the CARES Act in the spring are poised to expire at the end of the month. These include the Pandemic Emergency Unemployment Compensation and Pandemic Unemployment Assistance programs, which together provide benefits for more than 13 million Americans.
This post will be updated with the U.S. Labor Department’s monthly jobs report results Friday at 8:30 a.m. ET. Check back for updates.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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