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Jobs Numbers Disappoint at 245K, Unemployment 6.7%

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Friday, December 4, 2020

Nonfarm payrolls for November came in this Friday morning, notably lower than consensus expectations: 245K new jobs were created last month, even fewer than Wednesday’s private-sector ADP (ADP - Free Report) number of 307K, and well below the 430-440K expected. The Unemployment Rate, however, came in at 6.7%, a tick below the 6.8% anticipated and 20 basis points from October.

Revisions to the previous two months were net gains overall: September’s tally moved from 672K new jobs originally reported to 711K this morning, while October went from 638K to 610K in the latest update. Average Hourly Earnings rose higher than expected, +0.3% versus 0.1% the previous month, but the Labor Force Participation Rate fell to 61.5%. This amounts to 400K Americans having left the workforce — either from layoffs, companies gone out of business, etc. — and is disturbingly lower from pre-pandemic levels by about 4 million people.

By industry, the lion’s share of new jobs (ahead of holiday shopping season) came not from Retail but from Warehousing: 145K. Retail actually lost 35K jobs last month. Professional/Business Services had a good month again, +60K, followed by the most consistent industry job gainer, Healthcare, at 46K. Manufacturing and Construction both performed well on improved housing and homebuilding conditions, +27K and +20K, respectively.  Government lost 100K positions last month, most of which came on the federal level and likely involve census-worker layoffs.

Temporary layoffs fell for the month, but the number of permanently unemployed Americans rose. Perhaps these types of harsh statistics will spur leaders on Capitol Hill to arrive at a new stimulus agreement that will bring some much-needed relief to the American household and small business. To that end, talks between Senate leader McConnell and House Speaker Pelosi are reportedly on today, perhaps discussing whether to pass a proposed $908 billion package, consisting of new funds totaling $300-350 billion.

The Trade Deficit for the month of October also was released this morning, and news here was better than expected: -$63.1 billion is still historically steep, but an improvement from the -$64.7 billion expected, and the near-term low from August of -$67.0 billion, which is also close to the all-time low from prior to the Great Economic Collapse of -$68.3 billion in the mid-2000s. The revision to September was also an improvement, to =$62.1 billion from -$63.9 billion originally reported.

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