Unemployment Rate Drops to 6.7 Percent As America Prepares for Potential Lockdown

With the election over and a vaccine imminent, the U.S. economy faces one last big hurdle: a second potential lockdown. Let’s take a look inside the latest unemployment numbers released by the Department of Labor this morning.

December 4, 2020 – Employment rose by 245,000 in November as the U.S. unemployment rate fell to 6.7 percent, according to the most recent U.S. Bureau of Labor Statistics report released this morning.

That’s down from a peak of 14.7 percent in April, but still far above the 3.5 percent rate in February before the coronavirus pandemic led to mass economic shutdowns across the country. Wall Street expected the November jobs report to show a gain of 500,000 jobs overall and a 6.8 percent unemployment rate.

Other employment reports this week underscored the decelerating trend. Private-sector hiring fell to the lowest level in four months in November, according to data tracked by ADP. New weekly jobless claims began rising again around the 12th of the month, when the Labor Department conducts its surveys for its monthly jobs report. And in the Federal Reserve’s November Beige Book, the central bank noted that nearly all districts reported rising employment, “but for most, the pace was slow, at best, and the recovery remained incomplete.”

“Today’s report is both a wakeup call and a warning,” said Nick Bunker, Indeed economic research director. “Coronavirus cases are surging throughout the country and several federal relief programs are set to expire this month. Progress in the labor market has slowed at the worst possible time. We might be optimistic about the spring, but the winter could bring another round of economic pain.”

“This surge in cases has the potential to significantly slow down overall economic activity and therefore employers’ desire to hire,” said Mr. Bunker. “The pullback from those households could slow consumption and therefore overall economic growth,” he said — a major risk given that consumer spending fuels some two-thirds of economic activity.

“ADP’s employment report was somewhat disappointing,” said Julia Pollak, labor economist at ZipRecruiter.com. “Ideally, we’d be adding two million a month and really climbing out of this recession.”

“Demand continues to be two to three times across the board what it was pre-pandemic,” said Phillip Vander Klay, director of policy and government relations at the National Diaper Bank Network, which works with about 220 diaper banks around the country. “With the combination of shutdowns starting up again, increased restrictions and the delay in getting more emergency relief from the federal government, we really expect this to continue into the holiday season.”

Where Job Growth Occurred

  • Employment in transportation and warehousing rose by 145,000 in November but is 123,000 below its February level. In November, employment rose by 82,000 in couriers and messengers and by 37,000 in warehousing and storage; since February, employment in these industries has increased by 182,000 and 97,000, respectively. Job growth also occurred over the month in truck transportation (+13,000).
  • In November, employment in professional and business services increased by 60,000, with about half the gain occurring in temporary help services (+32,000). Job growth also occurred in services to buildings and dwellings (+14,000). Employment in professional and business services is down by 1.1 million since February.
  • Healthcare added 46,000 jobs in November, with gains occurring in offices of physicians (+21,000), home healthcare services (+13,000), and offices of other health practitioners (+8,000). Nursing care facilities continued to lose jobs (-12,000). Healthcare employment is 527,000 lower than in February.

Related: Talent Acquisition Success Factors in the Age of COVID-19

  • Construction gained 27,000 jobs in November, but employment is 279,000 below its February level. In November, employment rose in residential specialty trade contractors (+14,000) and in heavy and civil engineering construction (+10,000).

In November, manufacturing employment increased by 27,000. Job gains occurred in motor vehicles and parts (+15,000) and in plastics and rubber products (+5,000). Employment in manufacturing was 599,000 lower than in February.

  • Financial activities added 15,000 jobs in November. Gains occurred in real estate (+10,000) and in nondepository credit intermediation (+8,000). Financial activities has added 164,000 jobs over the past 7 months, but employment in the industry is 115,000 lower than in February.
  • Employment in wholesale trade continued to trend up in November (+10,000) but is 281,000 lower than in February.
  • Government employment declined for the third consecutive month, decreasing by 99,000 in November. A decline of 86,000 in federal government employment reflected the loss of 93,000 temporary workers who had been hired for the 2020 Census. Employment in local government education continued to trend down (-21,000).
  • In November, retail trade lost 35,000 jobs, reflecting less seasonal hiring in several retail industries. Employment decreases occurred in general merchandise stores (-21,000); sporting goods, hobby, book, and music stores (-12,000); electronics and appliance stores (-11,000); and health and personal care stores (-8,000). By contrast, furniture and home furnishings stores and automobile dealers added 6,000 jobs and 4,000 jobs, respectively. Employment in retail trade is 550,000 lower than in February.
  • Employment in leisure and hospitality changed little in November (+31,000) but is down by 3.4 million since February. Arts, entertainment, and recreation added 43,000 jobs in November, while employment in food services and drinking places changed little (-17,000).
  • Employment in other major industries, including mining, information, and other services, showed little change in November.

Looking Ahead

Employers in the U.S report improved hiring plans for the remainder of the year following the ten year low reported in Q3 according to the ManpowerGroup Employment Outlook Survey of more than 8,700 U.S. employers. Employers report an employment outlook of +14 percent, recovering 11 percentage points from Q3 yet down six percentage points year-over-year.

Executive Recruiting in a Post-COVID-19 Era
The COVID-19 pandemic has had a big impact on every business sector, executive recruiting included, costing organizations billions of dollars in lost revenue. Goldman Sachs estimates that economic growth around the world will be zero in 2020 thanks to the virus. For the executive search industry, where recruiters are constantly traveling to have face-to-face meeting with clients, things have changed drastically and search consultants have had to adapt to a whole new way of conducting business.

“Though we still have a long way to go to recover from what started as a health crisis and has evolved to a social and economic crisis, it is encouraging to see optimistic outlooks in some of the industries most heavily impacted including leisure, retail and manufacturing,” said Becky Frankiewicz, president of ManpowerGroup North America. “We also see employers recognize this recovery will take longer than they initially thought and many are adapting work models for the long term.”

“This is accelerating a shift closer to what we know workers have wanted for some time; autonomy to choose how and where they get their work done, more learning on demand, and a focus on achieving a better blend of work and home,” Ms. Frankiewicz said. “Now is the time for employers to offer targeted skills development and more flexible future-focused work options for those working remote and in the workplace”.

Related: How C-Level Managers Are Looking for Jobs

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor  – Hunt Scanlon Media

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