Dismal Labour Market Report Highlights Need for More Stimulus
- By John Tierney
- 2 min read
As we expected, the November labour report portrayed a US economy that has lost all the forward momentum gained from summer’s post-lockdown reopening. Among the lowlights:
Private payrolls rose 245,000, considerably below the 450,000 consensus. Even that spot of good news was partially offset by a 74,000 drop in the broader household survey of employment (which includes farm workers and gig workers/freelancers who are not payroll employees).
The official unemployment rate dropped 0.2pp to 6.7%, but that was because unemployed people dropped out of the labour force.
The labour force shrank by 400,000, causing the participation rate to drop 0.2% to 61.5%. The labour force participation rate has meandered in a tight range since June, after recovering from a low of 60.2%. It remains far below February’s level of 63.4%. More to the point, 4.1 million people who were working early in the year remain on the sidelines.
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