The latest national jobs report reflects that the U.S. economy is adding jobs but at a slower pace and many Americans who lost work in recent months have stopped seeking employment.
The November jobs report released Dec. 4 by the Bureau of Labor Statistics showed the nation’s economy added 245,000 jobs for the month, which dropped the U.S. jobless rate to 6.7%. The government said the drop in unemployment indicates the continuing trend in recent weeks of businesses resuming operations in wake of the pandemic.
Michael Hicks, director of the Center for Business and Economic Research at Ball State University, said the addition of more than 240,000 jobs was the smallest increase “since the COVID recession began.”
“The topline number of jobs was the best part of the report,” Hicks said. “The labor force shrunk by 400,000 jobs, signaling an unhealthy balance between job creation and labor market participation.”
The nation's unemployment rate fell to 6.7%, from 6.9% in October as many people stopped looking for work and were no longer counted as unemployed.
Hicks said the effects of COVID likely caused much of this reduction in the supply of labor as families struggled with healthcare issues and childcare through the worsening pandemic.
“Worse still, these data were collected in early November, when COVID cases were much fewer than they will be next week when the survey is conducted for the December Jobs report,” he said.
Among the unemployed, time to return to work grew by an average of two weeks last month to 23.2 weeks, while permanent job losses again rose. It’s estimated that there were still 10 million few jobs in the U.S. in November than in February.
Hicks said the pandemic-fueled recession raised permanent job losses back to 2013 levels, indicating a lengthening recovery, he said.
Hicks said November’s jobs numbers reflects a difficult long-term path for the economy. At this pace, it will take another four years for employment to return to early 2020 levels and six years for permanent job losses to shrink back to January levels, he said.
“In 22 days, on Dec. 26, more than 345,000 Hoosiers will lose unemployment benefits as the CARES Act expires,” he said. “This will be the worse one-month shock to personal income in state history and will come at what may well be the peak of the Coronavirus outbreak.”
Hicks said If the CARES Act is not extended, the state should expect “deepening short run economic losses.”
“If the CARES Act is not extended to state and local governments, we should expect the recession to continue to reduce economic activity through 2025,” he said.