Today’s report is both a wakeup call and a warning. Coronavirus cases are surging throughout the country and several federal relief programs are set to expire this month. Progress in the labor market has slowed at the worst possible time. We might be optimistic about the spring, but the winter could bring another round of economic pain.
The private sector continues to add jobs, but at a slowing pace, coming in at 40% below what it was in September. Of all new private sector jobs, 42% came from transportation and warehousing. Leisure and hospitality employment is still down 20% from its pre-pandemic levels, adding only 31,000 jobs in November. The public sector numbers are even more concerning. Local governments shed 20,000 education jobs in the month and the end of temporary Census jobs pulled down Federal payrolls.
The unemployment rate declined, due to another drop in workers on temporary layoff. The share of workers in their prime working years with a job was stagnant and still well below levels from earlier this year. Core unemployment, a measure of more enduring forms of unemployment, rose again in November. There are some points of improvement, but damage is mounting.
The prospects for next year seem brighter with the possible roll out of multiple vaccines. However, a vaccine is not a cure-all for the economy. A vaccine will not re-open closed businesses or reimburse lost wages. In the absence of renewed fiscal relief or a jump in job growth in the months ahead, millions of people could be in for a dire winter.
