The Washington PostDemocracy Dies in Darkness

U.S. economy adds 210,000 jobs in November as unemployment rate drops

The November unemployment rate fell to a pandemic low of 4.2 percent, from 4.6 percent in October

Updated December 3, 2021 at 2:17 p.m. EST|Published December 3, 2021 at 8:33 a.m. EST
A sign at a Publix supermarket in Richmond in June. (Steve Helber/AP)
9 min

The U.S. economy added a disappointing 210,000 jobs in November, even as the unemployment rate fell to a new pandemic low, reflecting a recovery complicated by ongoing pressures.

But the 4.2 percent unemployment rate, down from 4.6 percent in October, was notably significant, because it came as more than half a million workers, especially women, returned to the workforce. During much of the pandemic, drops in the unemployment rate have been a result of people leaving the workforce because of public health concerns, child-care challenges and retirement.

The uneven jobs report, from two separate surveys compiled by the Bureau of Labor Statistics, is just the latest sign of turmoil in the economic recovery, with higher prices spreading through a broad array of goods, ongoing supply chain shortages, and labor shortfalls that continue to hamstring companies’ ability to deliver goods and services.

“Holistically this report looks pretty good,” said Drew Matus, chief market strategist for MetLife Investment Management. “More people are participating in the economy, and fewer of them are unemployed. When you take those two together, I think they’re more important than what the headline payroll figure might look like.”

Coronavirus cases began rising the week that the surveys were taken, and the data, which is seasonally adjusted according to pre-pandemic patterns, is still vulnerable to surprising shifts because of the way the pandemic has thrown off the rhythms of the economy.

The BLS has been revising initial jobs data upward routinely over the past six months, including some of the biggest revisions on record. September and October followed that pattern more modestly, with the agency reporting a total of 82,000 more jobs gained than originally reported.

The U.S. has added nearly 1 million more jobs in 2021 than initially reported

Yet November’s job gains were the slowest of the year so far. Leisure and hospitality, the sector hit hardest by the pandemic, had a particularly low month, adding back only 23,000 jobs. It is still down 1.3 million jobs from February 2020.

Health care, down 450,000 jobs since the beginning of the pandemic, gained back only 2,000 jobs. Hiring in other major industries like wholesale trade and public and private education was flat for the month.

The retail sector lost 20,000 jobs, with declines in general merchandise stores; clothing and clothing accessories stores; and sporting goods, hobby, book and music stores.

Some of the biggest gains were in professional and business services, which added 90,000 jobs; transportation and warehousing, which increased by 50,000; and construction and manufacturing, which each added 31,000 jobs for the month.

“The slowdown was largely driven by the service sector, which has both the largest remaining shortfall to pre-crisis jobs levels and has also carried jobs growth for the year,” said Daniel Zhao, senior economist at Glassdoor. “The delta wave is still lingering. . . . We can’t write off the effects of the pandemic on the labor market.”

Zhao pointed out that 69 percent of the remaining jobs shortfall is in leisure and hospitality, education, and health care — sectors that rely on face-to-face interactions among large numbers of people.

“Because covid-sensitive industries are where job shortfalls remain, the resurgent pandemic and concerns about the omicron variant means that covid remains the largest threat to a full jobs recovery,” he said.

A record 4.4 million Americans left their jobs in September, the last month data is available, and job openings remain near a record high, giving workers more leverage than they’ve had in decades. Wages too have risen significantly over the last year, although those increases have largely been wiped out by inflation thus far.

But the picture is complicated for many workers navigating the new climate.

Brittany Sharnez, 28, a digital marketing specialist from Little Rock, recently landed her first full-time job since being laid off early in the pandemic.

She’s excited about the position, a communications and marketing manager for a nonprofit that helps Black and Latino children and young adults get into the computer science world. It will be the highest salary she’s ever made and includes full benefits, such as health insurance. The firm is based in New York but will allow her to work remotely.

Still, it was a long road back, more than 18 months. She could find contract work but wanted a full-time position. She applied to hundreds of openings, paid a specialist to polish her résumé and participated in a live video interview show on LinkedIn, where job seekers talked about their experience and qualifications to attract recruiters. She said all the talk about the hot jobs market just didn’t capture the challenges facing people like her.

“Most of the times, that talk comes from people who are not job hunting and who have not job hunted in many years,” she said. “They’re driving around seeing all these ‘hiring now’ signs, saying, ‘Oh it should be easy,’ and they have this in their head that people don’t want to work. They don’t know that there are [employers] who are ghosting people or are trying to push you through this lengthy hiring process that you don’t have time for because you have bills right now. It’s been really hard.”

Economists had been predicting about 500,000 to 600,000 new jobs for November, after similarly strong gains in October raised hopes for a period of more sustained labor market growth.

Still, labor market growth has been encouraging this year so far: The country has been adding more than 500,000 jobs a month on average, gaining back more than 5 million jobs lost in the early days of the pandemic. At 4.2 percent, unemployment wasn’t forecast to fall this low until 2024, according to a February estimate from the nonpartisan Congressional Budget Office.

White House advisers said they expect inflationary pressures to slow down over the next year, and the gains made by workers, in their wages and standing, to last.

“The Biden economic agenda isn’t just providing opportunities to people, it’s providing bargaining clout to low- and middle-wage workers,” said Jared Bernstein, one of President Biden’s chief economic advisers. “He’s not solely interested in job gains — he’s interested in good job gains and gains that provide workers with bargaining power.”

In November, the participation rate, or the percentage of people either working or looking for work, rose to 61.8 percent of the overall workforce, its highest level since March 2020. Some 594,000 workers reentered the labor force, slightly more than half of them — 304,000 — women.

“The overall momentum of labor market recovery is strong,” said Odeta Kushi, an economist at First American Financial Corporation, a financial-services company. “Adding more workers to the labor force — that’s incredibly important.”

The only major racial group that lost workers in November was Black women, some 91,000 of whom left the labor force, according to the report. Workers without high school degrees also dropped out of the workforce last month.

Yet many of the pandemic-long hang-ups that have kept workers out of the labor force remain, particularly as coronavirus cases rise again and questions about a new and potentially more transmissible variant loom.

Emma Sable-Smith, 31, quit her job in October as a data manager with the state of Wisconsin to take care of her 8-month-old son. Day care was out of the question for her, with so many lingering cases. And the cost of hiring a nanny made it easier for her to quit, with the added benefit of being able to spend more time with her baby.

“Weighing all of that, it became a no-brainer for us,” said Sable-Smith, who plans to restart her career after her child turns 1 and the pandemic is more under control. “We didn’t want to take on the risk [of day care]. Especially with a kid that’s under a year old.”

Sable-Smith is among what economists believe are many thousands of women who have left the workforce for child-care or family-care reasons but intend to return once the public health crisis eases — a big challenge to the labor force’s recovery.

There have been some positive economic signs recently as well. Weekly unemployment filings have trended steadily downward in recent months, even dipping below the pre-pandemic average to a new historical low the week before Thanksgiving.

The trade deficit narrowed in October, and consumer spending increased at its fastest pace since March, according to estimates from the Commerce Department.

However, inflation hit a three-decade high in October, driven by rising energy prices and ongoing supply chain backlogs resulting in higher prices in a broad range of categories including shelter, food, medical care and new vehicles. And a new chapter of the public health crisis remains an ever-present threat to upend the momentum in the labor market.

Americans have reported that they are growing more skittish about the economy’s long-term prospects. The University of Michigan Consumer Sentiment Index found that Americans are increasingly wary of “an escalating inflation rate and the growing belief … that no effective policies have yet been developed to reduce the damage from surging inflation.”

The surveys on which the labor market data is based were taken during the second week of November, at the beginning of the recent rise in coronavirus cases, and weeks before concerns began emerging about the new omicron variant.

Andrew Van Dam contributed to this report.