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The 245,000 new jobs added last month are the smallest since the recovery began in the United States in May



In November, the US economy created just 245,000 new jobs.

Herica Martinez / France-Press Agency / Getty Images

The numbers: The United States restored 245,000 jobs in November and the unemployment rate fell again, but employment fell to a seven-month low in a clear sign that the record rise in coronavirus cases is harming the economy and making it harder for people to return to work.

The increase in jobs last month did not reach the forecast of 432,000 economists surveyed by MarketWatch. Wall Street’s reaction was muffled, with shares opening a little higher.

Look: MarketWatch economic calendar

Private sector wage growth rose by a stronger 344,000, but a decline in government jobs of almost 100,000 reduced the overall increase in employment.

Meanwhile, the unemployment rate fell for the seventh consecutive month to 6.7% from 6.9%, marking a new pandemic bottom.

However, the decline mainly affects 400,000 people who have lost their jobs because they either could not find work or had to take care of a family member who caught the coronavirus.

Hiring rates have been slowing for months, as expected, after millions returned to work in May and June. Yet the United States has recovered just over half of the 22 million jobs lost at the start of the pandemic, and the winter surge in coronavirus cases threatens more layoffs in businesses such as restaurants, hotels, airlines and mum and pop stores.

The softening of the labor market and the growing damage from the coronavirus could force Congress to end the month-long opposition and adopt a new package of federal aid for the unemployed and troubled businesses.

What happened: The biggest profit in hiring last month came from warehousing and transportation companies such as UPS and Fedex.

They added 145,000 new jobs ahead of the holiday season, reflecting an increase in online shopping and an improvement in the economy.

Employment in professional companies has risen by 60,000, and health companies have created 46,000 jobs as they continue to recover from a sharp drop in employment last spring.

Manufacturers have added 27,000 jobs, but companies are struggling to find skilled workers and are suffering from more absences due to the pandemic.

Finance companies have also hired 15,000 people amid a stock market boom and an influx of people applying for mortgages or refinancing home and car loans.

Outside these areas, employment was low or there were job losses.

Construction companies employ only 1,000 people. Although home sales have risen during the pandemic, builders are also facing a shortage of skilled workers and are reluctant to invest too aggressively until the economy recovers more widely.

Bars and restaurants are quitting for the first time since the coronavirus pandemic erupted in April. They face renewed restrictions across the country on how long they can be open and how many customers are allowed.

Retailers, another industry hit hard by the pandemic, cut nearly 35,000 jobs in November. Part of the decline is likely to reflect fewer seasonal rents in anticipation of fewer holiday spending, but retailers are also coping with new government restrictions and fewer customers willing to dare.

Last month, government employment also fell by 99,000, including the loss of 93,000 temporary workers used to conduct the U.S. census in 2020. State and local employment also fell again.

Appointments in October and September have changed little, the revised data show. The increase in new jobs in October was reduced by 28,000 to 610,000. Job gains in September were increased by 39,000 to 711,000.

Read: Unemployment claims fall during Thanksgiving week. Holiday slip?

Aalso: Unemployment claims are high and many unemployed are padded

Big picture: The economy is likely to recover sharply next year if a number of coronavirus vaccines prove effective, but will experience more swelling before it gets there.

The recent recruitment delay and the threat of new layoffs due to the coronavirus are the latest problems. How big they will become – and whether that will hinder recovery – will depend on whether the virus is brought under control soon and whether Washington approves more aid for workers and businesses.

Market reaction: Dow Jones Industrial Average DJIA,
+ 0.36%
and S&P 500 SPX,
+ 0.37%
were set to open higher on Friday deals.


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