US President Joe Biden talks about the November jobs report from the White House dining room in Washington, DC, on December 3, 2021.
Andrew Capilero Reynolds | AFP | Getty Images
WASHINGTON – President Joe Biden shrugged off a weak November jobs report on Friday, focusing instead on the low unemployment rate and the trend of growth and economic recovery throughout the year.
The Labor Department reported earlier today that the US economy created significantly fewer jobs than expected in November, a sign that employment had begun to slow even before the new alternative to Covid omicron was announced.
Nonfarm payrolls increased by just 210,000 in the month, although the unemployment rate fell sharply to 4.2% from 4.6%. The labor force participation rate increased during the month to 61.8%, the highest level since March 2020.
In a speech at the White House officially described as “Notes on the November jobs report,” Biden skipped job creation data almost entirely.
“Today we received incredible news that our unemployment rate has fallen to 4.2%,” he said. “And we look forward to the largest drop in unemployment in one year ever.”
The apparent contrast between a low unemployment rate and relatively weak job growth may be due to a variety of factors.
Several economists have noted that the salary calculation used to assess the number of new jobs differs from the self-reported household survey used to arrive at the overall unemployment rate.
They said the apparent disconnect between the nonfarm payroll growth figure of 210,000 and the unemployment rate of 4.2% could partly reflect the differences between the two surveys.
The Bureau of Labor Statistics’ monthly household survey asks people if they are currently employed. Thousands of Americans have started small businesses from home during the pandemic, and these people are likely to consider themselves employees for survey purposes, even though they may only have one or two employees.
By contrast, the key monthly jobs figure is based on salary reports from about 150,000 larger companies and government agencies. So this survey may fail to capture thousands of entrepreneurs who have started small businesses in the last two years.
The upshot is that job growth figures point to an economic recovery weaker than the unemployment rate.
It’s not hard to see why the president chose to focus on the unemployment rate, rather than the number of jobs, which he mentioned once in passing. Biden also noted that this year’s preliminary job numbers have seen significant upward revisions.
The October and September estimates were raised to 82,000 in the report released Friday.
“Because of the extraordinary strides we’ve made, we can look forward to a brighter and happier new year,” Biden said.
However, even as he touted the progress made last year, the president did not hesitate to address widespread concern among voters about inflation, supply chain issues, and Covid.
“Families are worried,” he said. “Worrying about Covid, worrying about the cost of living and the economy more broadly, they still aren’t sure. I want you to know I hear you. It’s not enough to know we’re making progress. You need to see and feel it in your own life, around your kitchen table, and in your checkbooks.” “.
Stocks fell on a combination of weaker-than-expected job numbers and concerns that a stronger unemployment rate could convince the Federal Reserve to accelerate its declining measures.
In response to the November report, Commerce Secretary Gina Raimondo told CNBC that investors should look at the big picture and not any particular month. Job growth so far this year has exceeded 6.1 million. The 2021 average monthly gain of 555,000 jobs (excluding November) puts the US economy into full recovery from the pandemic – back to the February 2020 unemployment rate of 3.5% – by the end of 2022.
This is earlier than many economists expected.
The sectors that made the biggest gains in November included professional and commercial services (90,000), transportation and warehousing (50,000) and construction (31,000). Even as the holiday shopping season approaches, retail has seen a drop of 20,000.
Workers’ wages rose during the month, rising 0.26% in November and 4.8% from a year ago. Both numbers were slightly below estimates.
However, economists generally share the president’s view that November’s jobs data generally contains more good news than bad news.
“We’re heading into the holiday season in good shape,” Biden said.
– CNBC’s Jeffrey Cox contributed to this report