The number of jobs added in November was lower than half anticipated by Wall Street, even as unemployment dropped by 0.4%, retail lost 20,000 jobs, and experts fear a worsening of inflation woes and the effect of omicron.
November jobs less than half of expectations
The Dow Jones estimated 573,000 new jobs in November, but the latest job report released Friday by the Bureau of Labor Statistics came in at less than half of the projected numbers, NBC reported.
In November, the Labor Bureau reported that only 210,000 jobs were added to the US economy.
The biggest gains were in the personal and business services and the transportation and warehousing sectors.
Retail had the biggest losses, vacating 20,000 jobs, while growth in the hospitality sector was sluggish.
It’s a stunning and disappointing drop from October when the Biden administration celebrated an increase of 546,000 jobs being added to the economy.
Effect of omicron variant unknown
Many economists are wary because the decline occurred before reports of the new omicron variant emerged and has now led to several measures limiting transportation and the possibility of additional restrictions.
Many of the major indices are taking some of their biggest losses all year in recent days, NBC reported, as market volatility has been triggered by new restrictions imposed in the wake of the omicron variant.
Unemployment numbers a minor bright spot
Wall Street had expected unemployment to drop to 4.5 percent. However, the number of jobless claims beat expectations, falling 0.4% to come in at 4.2%.
Another bright spot is an increase in labor force participation, and while depressed, it managed to climb to 61.8% for November – its highest level since March 2020, CNBC reported. According to ILO, labor force participation is a measure of the proportion of a country’s working age population that engages actively in the labor market.
However, experts are still concerned about the labor force participation rate, which remains depressed overall, and fear the new omicron variant will depress it further.
Inflation here to stay well into 2022
This week, Federal Reserve Chairman Jerome Powell said he expects high inflation will “certainly” continue “through the middle of” 2022. Powell opined that the US government should accept this fact and stop trying to portray the current inflation as something that is “transitory,” the Daily Wire reported.
However, Powell vowed: “We will use our tools to make sure that higher inflation does not become entrenched.”