The U.S. labor-market rebound slowed markedly in November, indicating the surge in COVID-19 cases is hitting workers and curbing the broader economic recovery.
Nonfarm payrolls increased by 245,000 from the prior month and the unemployment rate edged down to 6.7%, the Labor Department said Friday. The data also showed a worrisome decline in Americans participating in the labor force, as more people left jobs and the workforce altogether.
Job gains missed analyst estimates and partly reflected a decline of 93,000 temporary workers who had been hired for the decennial census.
The faint pulse raises odds the chances that President-elect Joe Biden will inherit an even weaker labor market next year, with the recovery at risk of stalling during the wait for widespread vaccine distribution.
With almost 4 million Americans enduring long-term joblessness, the report may also help push Congress to pass new fiscal aid by year-end and could make Federal Reserve officials more inclined to provide new stimulus when they meet Dec. 15-16.
U.S. stocks rose at the open, while 10-year Treasury yields extended their increase after the report and the dollar was lower.
“You are seeing the impact of the pandemic surge here,” said Jeffrey Rosenberg, senior portfolio manager at BlackRock. “The market reaction is really looking through this to the policy response.”
Chicago Fed President Charles Evans said the report was “a little disappointing.”
The employment report is a mid-month snapshot, so jobs lost amid new restrictions and lockdowns put into place in the weeks since won’t be reflected until December’s data.