New York (CNN Business)The November jobs report looked disappointing at first glance, but the details show that the recovery is very much moving along.
US employers added another 210,000 jobs to the economy in November, far fewer than expected, the Bureau of Labor Statistics reported Friday. It was the smallest number of jobs added to the US economy since December 2020, when the economy actually shed jobs amid a surge in Covid cases.
Economists had expected more than double the number of jobs created in November, forecasting a continuation of the buoyant economic recovery over the past two months.
Instead, the November jobs gain was more reminiscent of the pre-pandemic economy, when employers added a smaller but steady number of positions, at least on the face of it.
But even with a smaller-than-expected number for November, job gains this year have totaled more than 6 million, "putting us well on track for a full recovery by the end of 2022," according to Elise Gould, senior economist at the Economic Policy Institute.
That said, Friday's report also comes as the Omicron variant has become a global concern. What's worse is that the November jobs tally was completed before the new variant was even identified. Some economists expect hiring might slow this month as businesses and employees grapple with the ramifications of the new variant.
Where does this leave the recovery?
Beyond the headline number, Friday's report did include several pieces of good news. The unemployment rate fell to 4.2%, a new pandemic-era low.
And America's labor force participation rate, which has remained relatively depressed throughout the recovery, edged up to 61.8%, the highest level since March 2020.
While Friday's main number was decidedly disappointing at first glance, the US economy has added more than 1 million jobs over the past three months, signaling that the recovery continues to move along.
"BLS revisions to job growth in recent months have been upward, and much larger than normal," said PNC Chief Economist Gus Faucher about the data revisions of the past months. "Thus, the slowing in job growth in November should not be taken at face value."
The drop in joblessness together with the increase in participation is "unalloyed good news," Faucher said.
"You've gotta get under the hood of these high frequency monthly reports," a senior White House official told CNN Business. "We focus on the averages over numerous months."
This year, monthly job gains have averaged 555,000.
It's true that one month does not a trend make, and revisions over the past months — the summer in particular — have painted a much more positive picture than the dire jobs situation government economists one portrayed. But November was perhaps America's last best chance to add a robust number of jobs before businesses and employees digested the Omicron news, which some economists believe could put hiring on ice for a bit.
Retail rout
Professional and business services, transportation and warehousing, construction, as well as manufacturing, added the most jobs last month.
But the retail sector, which should be swelling for the holidays, instead lost jobs.
"It is not clear if this is a seasonal issue, or some sort of shift in terms of the timing of holiday help, but overall the payroll data does not match up with the alternative indicators of labor market activity that we track," wrote Thomas Simons, money market economist at Jefferies, in a note to clients.
Simons expected to see either retail or leisure and hospitality payrolls to rise. The latter sector added some jobs, but not many, last month.
However, taking out the seasonal adjustments, the retail sector actually added more than 300,000 jobs. This points to weaker holiday hiring than normal — especially as employers continue to struggle with a shortage of workers — rather than retailers laying people off.
Overall, the economy is still down 3.9 million jobs from its pre-pandemic levels.
For those who are working, wages continued to climb in November as employers are trying to attract staff during the ongoing worker shortage. Average hourly earnings rose by 8 cents to $31.03, putting the increase over the past 12 months at 4.8%.
That's a decrease from the pace of wage gains in October, and "the slowest monthly pace since March, consistent with sequential easing in labor supply constraints," according to economists from Goldman Sachs.