According to the latest economic analysis from the BBVA Research team, November’s unemployment figures suggest that the labor market is losing momentum as the pandemic worsens and fiscal support wanes. Additionally, the ongoing increase in permanent unemployment reveals the damaging long-term effects of the pandemic. Both situations highlight the need for Congress to take action and adds pressure on the Fed to take more decisive action.
Nonfarm payrolls rose by 245,000 in November, down from 610,000 in October and significantly lower than market expectations, according to the Bureau of Labor Statistics. To date, the economy has recovered 56 percent of jobs lost since the start of the pandemic, while the number of unemployed remains nearly twice the pre-pandemic levels.
The analysis, co-authored by BBVA Chief Economist Nathaniel Karp and Principal Economist Marcial Nava, notes the sharp slowdown in nonfarm payrolls is a response to three key factors: a decline in government employment resulting from fewer temporary census workers, a decline in retail trade jobs, and an overall weakness in the sectors that had been supporting the recovery including professional business services, leisure and hospitality.
Education and health services, manufacturing and construction continue to gain jobs at a decent pace, while transportation and warehousing posted its largest monthly gain since September 1997, supported by significant job growth in couriers and messengers. This last category reflects the massive shift to online consumption during the pandemic, according to the economists’ analysis.
BBVA USA’s research team analyzes the U.S. economy and Federal Reserve monetary policy. For its analyses, the economists create models and forecasts for growth, inflation, monetary policy and industries