Economists had expected the number to be above half a million for the second straight month. The shortfall was particularly stark given that the data was collected before the emergence of the omicron variant of the coronavirus, the latest turn in the pandemic.
There was good news in the report, however. A survey of households showed a big jump in total employment. The labour force grew by hundreds of thousands, and the unemployment rate fell to 4.2% from 4.6%.
The contradictory data presents President Joe Biden and policymakers with new complications, particularly with omicron’s potential impact yet to be established. The report also offers few clues to businesses about the months ahead.
With inflation surging to its highest rate in decades, Federal Reserve officials are weighing whether to step up efforts to rein in prices. And the Biden administration is eager to point to an accelerating recovery as a validation of its policies — including the $1.9 trillion package signed in March, the American Rescue Plan.
But Biden has been forced to concede that many Americans do not feel that improvement and have grown more pessimistic about the economy and his handling of it.
On Friday, he hailed the drop in the unemployment rate as a vindication of his administration’s policies — while acknowledging the mixed signals in the jobs report.
“Our economy is markedly stronger than it was a year ago,” he declared. But he went on to say: “It’s not enough to know that we’re making progress. You need to see it and feel it in your own lives — around the kitchen table, in your cheque books.”
Economic indicators were already ambiguous. Consumer confidence readings have been at a low ebb, but Americans have been on a spending spree, and investors seem unperturbed. Stocks declined Friday but remain near record highs.
Job gains in businesses requiring face-to-face contact — like stores, restaurants, bars and hotels — were especially soft last month. Retail employment dropped by 20,000 on a seasonally adjusted basis, while hiring in leisure and hospitality industries rose by 23,000, compared with a gain of 170,000 in October.
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