top of page

BIDENOMICS: Experts Predicted Nearly 600,000 Jobs In November, But Only 210,000 New Jobs Were Added

December 7, 2021

Economists predicted that the United States would see nearly 600,000 new jobs added during the month of November. The actual numbers came in at only 210,000, according to the U.S. Bureau of Labor Statistics, on Friday.

The unemployment rate fell by a 0.4 percentage point to 4.2% last month. There were solid gains in the professional and business services, transportation, warehousing, construction and manufacturing sectors. Somewhat surprisingly, employment in retail trade declined over the month.

The number of unemployed persons fell by 542,000 to 6.9 million.

The labor participation rate, even with strong job growth, remains lower than pre-pandemic levels. As of November, the workforce is still down by about 2.4 million participants, compared to February 2020.

The Department of Labor reported the unemployment rates broken down by different groups as follows:

  • Adult men (4%)

  • Adult women (4%)

  • Whites (3.7%)

  • Blacks (6.7%)

  • Hispanics (5.2%)

  • Teenagers (11.2%)

  • Asians (3.8%)

There was little change in the number of long-term unemployed (those jobless for 27 weeks or more), at 2.2 million. This rate is 1.1 million higher than in February 2020. The long-term unemployed accounted for 32.1% of the total unemployed in November.

The number of persons employed part time for economic reasons, at 4.3 million, changed little in November. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. This figure was about the same as in February 2020.

The rationale for a lower participation rate is based upon concerns about Covid-19 infections, challenges finding child care and a desire by many workers to leave their jobs and pursue roles with more flexibility, wages or benefits and disruptions caused by the supply chain problems. Moving forward, the Omicron variant may impact future hiring.

Workers, primarily in the food services, warehouse, fulfillment centers, leisure, hotel, travel and customer-facing roles have quit their jobs at an astounding rate. The effects of the pandemic caused a new mind shift. Millions of Americans no longer feel that they must stay at their jobs for long lengths of time, which was—up until recently—the accepted standard. Seeing how life can be cut short, there’s a collective movement to leave bad bosses, low wages, lack of growth potential and mistreatment.

The results of the Great Resignation showed that leisure and hospitality, which includes bars, restaurants, hotels and similar businesses, saw a lower-than-expected gain in new jobs of only 23,000. This sector, since the country started to reopen and relaxed many restrictions, was a big engine of job growth. Though the sector has recovered nearly 7 million of the jobs lost at the depths of the pandemic, it remains about 1.3 million below its February 2020 level.

Nick Bunker, economic research director at job-aggregation site Indeed, said about the jobs report, “The household survey shows accelerating employment gains, workers returning to the labor force and low levels of involuntary part-time work. The payroll survey shows a significant deceleration in job growth, particularly in [Covid-19]-affected sectors.”

There may be another theory as to why the economists and Wall Street experts misjudged the number of jobs added in November. Yong Kim, the CEO of Wonolo, a job platform for gig-economy and contract workers, contends that the Labor Department may not possess the necessary technology to capture the fast-moving job switches of temporary, gig and contract workers. There are estimates of around 55 million people participating in the gig economy and in nonpermanent, contract roles.

This thesis may tie some loose ends together. The U.S. economy is strong, healthy and consumers are spending money. This reflects that it's likely more people are working, but not accounted for in the statistics.

With the massive amount of these temporary workers moving around, they may fall off the government’s radar. It's similar to when an unemployed person receives all of their benefits. Once they’re finished collecting benefits, they fall off the radar and are no longer counted as unemployed. Many may still be unemployed, but are unaccounted for, as they’re not receiving funds from the government. These numbers could be substantial.

Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.

SOURCE: Forbes



Post: Blog2_Post
bottom of page