Falling US Job Growth Against Economists’ Prediction

Despite Having to Return to Work, There Are Still 3.9 million Americans That Have Not Yet Returned to Work in Comparison with February 2020

The employers in the United States had only been able to hire around 210,000 more working individuals in the month of November and have missed the predictions made by the economists regarding job growth for stronger growth of the nation. It had been expected that by the forecasters that the non-farm payrolls in the United States would see a rise of 550,000.

Decline in employment rates

However, the rate of unemployment has seen a sharp drop of 4.2%, and more citizens of the United States have returned back to the workforce after the gradual decrease in the number of active coronavirus cases in the region. The data collected regarding mixed jobs do not provide a reflection of the emergence of the new Omicron variant at the end of the month of November, which could have a strong effect on the recovery of the economy of the United States.

The President of the United States, Joe Biden, has described that the job growth and recovery are going very strong, despite having some very disappointing figures in the headlines. He said that the historic drop in the rate of unemployment today includes improvements of dramatic scale for the working individuals of the country. The rate of job growth has seen a drop of 4.6% in the month of October.

The monthly wages have also seen a rise in the recent previous few months, and many employers have also offered to provide some additional improvements in the conditions of work to be able to attract more amount of scarce labor, which would allow a rise in the job growth in the United States.

According to the chief economist at Grant Thornton, the current trend of employment in the United States is going in the right direction. The labor market is rapidly healing than it had been previously anticipated despite having some misses in the payrolls.

It was further added that the apparent contradiction that is being faced between the steep fall in the amount of unemployment along with slower than expected job growths are providing some hindrance in the already anticipated measurements, which has been collected through two surveys with one based on the data provided by employers and the other one that covered households.

Omicron variant

The outlook for the economy of the United States is set to have become increasingly complicated due to the onset of the new Omicron variant of the coronavirus infection. It has been said by the investment director at GAM investments that the arrival of the Omicron variant of the Covid-19 infection, which is expected to establish further in the United States, is still a very real and dangerous variable in relation to the speed of the recovery of job growths in the country.

He further added that when the Omicron variant is combined with the data of weaker than expected job growth, the Omicron variant was expected to delay the point when the Federal Reserves would be raising the interest rates in the country. In this week’s reading, the narrative of the first hike has been shifted, which was believed to be coming some time earlier in the upcoming next year to perhaps sometime later.

Hospitality, leisure, and retail, in particular, have not yet seen an increase in the amount of job offering on the scale that previously had been expected. The Bureau of Labor Statistics of the United States has stated that there has been a downward trend in the number of employments and job growths in the overall retail sector, after making some seasonal adjustments, of around 20,000, especially in the category of clothing stores and general merchandise.

There has been a rise in the employment for hospitality and leisure, which has risen up 23,000 but has still remained about 8% down in comparison to the time before the onset of the coronavirus pandemic. But, on the positive side, there has been an increase in the number of hires for some areas, including businesses and professional services along with warehousing and transport facilities. It has been said by the bureau that in areas of manufacturing and construction, job growth has been observed in the United States.

According to the figures obtained in the month of October, 546,000 new jobs had been added in the entire month.

Also read Biden Imposes Stricter Travel Rules Amid Increased New Omicron Cases