The US economy added 210,000 jobs in November, less than half the jobs growth that economists had expected, in a report that was compiled before the discovery of the Omicron coronavirus variant that now threatens to derail the economic recovery from the pandemic.
The unemployment rate dropped to 4.2% as employers added jobs in business services, transportation, warehousing and construction. The overall gain was less than half the 500,000 plus jobs that economists had expected to be added over the month.
November’s jobs report from the labor department comes after the US added 531,000 in October, a sharp increase after a slowdown in hiring triggered by the spread of the Delta coronavirus variant over the summer.
Over the month the retail sector lost 20,000 jobs and hiring in leisure and hospitality was lower than expected. In a note to investors, Capital Economics’ senior US economist, Andrew Hunter, said the figures suggest “the labor market recovery was faltering even before the potential impact of the new Omicron variant, possibly as a result of the rising infection rates in the north-east and midwest”.
Even though the unemployment rate fell again, Hunter said he was “skeptical that a further significant recovery in the labour force lies ahead – particularly given the worsening virus situation and the potential federal vaccine mandate”.
It remains to be seen whether the Omicron variant will, like Delta, have a damping effect on the jobs market. The Organisation for Economic Co-operation and Development (OECD) thinktank warned this week that Omicron and rising inflation could prove significant threats to the global economy.
The strong jobs report comes after ADP, the US’s largest payroll supplier, said private sector employees had added 534,000 jobs in October. Nela Richardson, chief economist at ADP, said: “Service providers, which are more vulnerable to the pandemic, have dominated job gains this year. It’s too early to tell if the Omicron variant could potentially slow the jobs recovery in coming months.”