Five worrying takeaways from Friday's U.S. jobs report
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[December 05, 2020] By
Dan Burns
(Reuters) - Friday's big monthly U.S.
payrolls report was a big disappointment, with roughly half the number
of jobs created in November as were forecast by economists in a Reuters
poll.
But the troublesome signs for the labor market were hardly limited to
the underwhelming headline number, which showed the weakest job growth
since the recovery began from the swoon induced by the COVID-19 outbreak
earlier this year.
Here are five worrying factors in the report:
HOUSEHOLD VS ESTABLISHMENT: WHO IS RIGHT?
The report is fueled by two surveys - one of U.S. businesses and one of
American households. The so-called "establishment" data on total
employment from businesses is much less noisy than the household
results, but more often than not the two at least move in the same
direction.
In November they did not. Businesses reported adding 245,000 jobs last
month, but households reported employment fell by 74,000. It was the
first negative print in that series since the historic dive in
employment in April.
LABOR FORCE PARTICIPATION LAGGING
Some 400,000 fewer people reported being a member of the work force in
November, the third drop in the last five months.
One sign of a healthy labor market is a consistently growing labor force
- those employed and those in the market for a job. After an initial
bounce back in May and June, the labor force has moved sideways since
and remains more than 4 million short of what it was before the pandemic
struck.
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People line up outside a Kentucky Career Center hoping to find
assistance with their unemployment claim in Frankfort, Kentucky,
U.S. June 18, 2020. REUTERS/Bryan Woolston/File Photo/File Photo
MORE DISCOURAGED WORKERS
One reason people cite for dropping out of the work force is that they are too
discouraged by the state of the job market to look for work. The ranks of these
workers are back near the five-year high reached in July after having grown in
November for the third straight month and by the most since June.
PERMANENT JOB LOSSES RISING
When the pandemic first struck and triggered more than 20 million job losses in
a single month back in April, the vast majority of those thrown out of work
expected their layoffs to be temporary. That dynamic has changed.
In November, more than 4.7 million people were categorized as "not on temporary
layoff" - meaning their job was permanently eliminated or they had completed a
temporary job that was not extended. That is nearly 2 million more than those
counted as being temporarily out of work and was the highest level in seven
years.
UNEMPLOYMENT DURATION IS GROWING LONGER FOR MANY
In February, just before the coronavirus pandemic broadsided the economy and job
market along with it, fewer than 20% of the 5.8 million people then counted as
unemployed had been out of work for 27 weeks or longer.
Fast forward to November and nearly 37% of the 10.7 million jobless Americans
had not worked in roughly half a year or longer. That percentage is the highest
since December 2013.
(Reporting by Dan Burns; Editing by Andrea Ricci)
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