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4 warning signs in the November jobs report: ‘This feels like the calm before the storm’

People receive food at a distribution site during the coronavirus pandemic.

Spencer Platt | Getty Images News | Getty Images

The U.S. economy added 245,000 jobs in November and the unemployment rate fell to 6.7%, the Bureau of Labor Statistics said Friday. It’s the seventh consecutive month of improvement from the depths of the Covid recession.

But warning signs are flashing under the surface.

Job growth slowed considerably and the labor force shrunk. The share of workers unemployed more than six months is fast approaching its historical peak. More than 1 in 10 Black workers remain unemployed.

These are concerning trends, economists said, especially as a surge in Covid cases, hospitalizations and deaths has led some officials to reimpose regional shutdown measures. The cold winter months threaten to further dampen economic activity as jobless benefits for millions are poised to expire at year’s end.

“It feels weird to say a report that shows 245,000 jobs added and a 0.2-point drop in the unemployment rate is worrying,” said Daniel Zhao, an economist at job and recruiting site Glassdoor. “[But] this feels like the calm before the storm.”

Slowing growth

Decelerating job growth is perhaps the most alarming signal in the November report, economists said.

Last month’s bounce is well short of the rebound in May and June, when businesses added 2.7 million and 4.8 million jobs to their payrolls, respectively. It also fell short of the 610,000 jobs added in October.

The U.S. is still 10 million jobs shy of its pre-pandemic level — a larger deficit than that during the depths of the Great Recession, which, prior to the Covid recession, was the worst downturn since the Depression.

“There’s no way to sugarcoat today’s weak jobs report,” said Robert Frick, an economist at Navy Federal Credit Union. “Last year, monthly gains were about 200,000, so we are far below a good pace to return the almost 10 million jobless Americans back to work.”

At November’s rate of growth, the U.S. wouldn’t recover its pre-pandemic employment levels for another four years, Zhao said.

Future job gains may be tougher, economists said, since many of the workers laid off on a temporary (rather than permanent) basis in the spring have already been rehired.

Of course, widespread distribution of a Covid vaccine may lead to a quick rebound in economic acti