The Great Job Slowdown

The Job Market is Looking Bleak
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The United States job figures for November were released and there was a gain of 245,000 jobs for the month. This did lead to a lower unemployment rate but hiring itself fell to a seven month low, a near prophetic sign that the increase in coronavirus cases throughout the country is causing damage to the economy and making it more difficult for people to return to work. The number of jobs added was well short of the 432,000 estimated by economists while at the same time the stock market didn’t take a hit from the bad news.

 

The private sector saw gains of 344,000 but the public sector, mostly government jobs, cut around 100,000 people reducing the overall gains. That saw the unemployment rate drop by .2% to 6.7% which is the lowest since the pandemic began. However with an estimated 400,000 people who left the labor force just in November is the real driving factor for the decreased unemployment rate as these people left to care for family members or just stopped looking for work. If adjusted for that the Bureau of Labor Statistics said that unemployment would be at least 7.1% right now.

 

With the pace of hiring slowing down for multiple months now after initial spikes as spring lockdown measures ended during May and June it was a matter of time before experts would be able to see long term effects. The United States has only seen just over 11 million of the 22 million jobs lost in the early portion of 2020, and with the pandemic surging across the country as well as small business struggles from the effects of the coronavirus it’s likely that many more jobs will be lost. The industries most likely to see these losses are hotels, restaurants, airlines, and single location small businesses.

 

The mounting pressure of these numbers may help Congress end a stalemate for a second stimulus that has been raging since May when the House of Representatives sent the first CARES Act bill to the Senate, whose leadership said that the money from the HEROES Act would be more than enough and have done little since. With the rest of the protections and clauses of the HEROES Act expiring at the end of the year just four weeks away, items like eviction protections, extended federal unemployment, and student loan payment would hit the struggling American public like a sack of bricks.

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