Payroll Growth Slowed in November as Omicron Threat Looms

Job growth slowed in November, posting the smallest increase this year with 210,000 jobs added after October’s upwardly revised 546,000 new positions, the Bureau of Labor Statistics reported on Friday (Dec. 3).

The unemployment rate dropped 0.4% to 4.2%, and the labor force participation rate went up slightly to 61.8%. Unemployment dropped by 542,000 to 6.9 million.

Both counts are improved from their highs at the end of February-April 2020, but are still up compared to pre-pandemic levels of 3.5% and 5.7 million in February 2020.

The sluggish job growth runs parallel to employers’ continuing struggle to attract workers to fill vacancies, and a pullback in confidence as the omicron variant of the coronavirus pops up in more locations.

See also: Leisure, Hospitality Drive Job Growth in October, US Adds 571,000 Positions

Job gains were highest in professional and business services, transportation and warehousing, construction, and manufacturing. Retail jobs went down in November. Employment in professional and business services overall is 69,000 below its level in February 2020.

Professional and business services added 90,000 jobs in November, while administrative and waste services added 42,000. Management, tech jobs and consulting services added 12,000 positions and computer system design and related services added 10,000.

Transportation and warehousing jobs went up by 50,000 in November and is 210,00 above its February 2020 level. In November, jobs increased by 27,000 in couriers and messengers and 9,000 in warehousing and storage.

Read more: Omicron COVID Variant May Slow Economic Growth, Drive Prices Up

Economists surveyed by The Wall Street Journal forecast 573,000 jobs would be added in November, with the unemployment rate expected to edge down to 4.5%.

“Just as delta derailed the recovery in terms of the labor market, if omicron behaved like that, I would guess it would hold back any recovery in the labor market,” Justin Weidner, an economist at Deutsche Bank, told The Wall Street Journal.

Federal Reserve Chairman Jerome Powell told Congress on Tuesday (Nov. 30) that the omicron variant could stifle recovery and worsen inflation.

“Greater concern about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” he said.