U.S. President Joe Biden speaks on the November Jobs Report from the White House State Dining Room in Washington, DC on December 3, 2021.
Andrew Cabellero-Reynolds | AFP | Getty Images
WASHINGTON – President Joe Biden glossed over November’s weak jobs report on Friday, focusing instead on the low unemployment rate and the trend of economic growth and recovery throughout the year.
The US economy created far fewer jobs than expected in November, a sign that hiring began to slow even before the new omicron variant Covid was announced, the Labor Department reported earlier today.
The non-farm payroll only increased by 210,000 for the month, although the unemployment rate fell sharply to 4.2% from 4.6%. The participation rate rose for the month to 61.8%, its highest level since March 2020.
In a speech to the White House officially billed as “remarks on the November jobs report,” Biden almost completely ignored the job creation data.
“Today we learned the incredible news that our unemployment rate has fallen to 4.2%,” he said. “And we are looking at the biggest drop in year-over-year unemployment on record.”
The apparent disparity between the sharp decline in the unemployment rate and the relatively weak employment growth could be due to a number of factors.
Several economists have noted that the wage tally used to estimate the number of new jobs is different from the self-reported household survey used to arrive at the overall unemployment rate.
They said the apparent disconnect between a non-farm payroll growth figure of 210,000 and an unemployment rate of 4.2% may in part reflect the differences between the two surveys.
The Bureau of Labor Statistics monthly household survey asks people if they currently have a job. Thousands of Americans started small home businesses during the pandemic, and these people would likely consider themselves employed for the purposes of the investigation, even if they only had one or two employees.
In contrast, the monthly employment figure is based on the payroll reports of about 150,000 large businesses and government agencies. This survey may therefore not capture the thousands of entrepreneurs who have started small businesses in the past two years.
The result is that the employment growth figure suggests a weaker economic recovery than the unemployment rate.
It is not hard to see why the President chose to focus on the unemployment rate, and not the number of jobs, which he only mentioned once in passing. Biden also noted that the first job counts this year saw substantial upward revisions.
Estimates for October and September were increased by a total of 82,000 in the report released on Friday.
“Because of the extraordinary progress we’ve made, we can look forward to a brighter and happier New Year,” Biden said.
Yet even though he praised the progress made over the past year, the President did not hesitate to respond to widespread voter anxiety over inflation, supply chain issues and Covid.
“Families are anxious,” he said. “Worried about the Covid, worried about the cost of living and the economy more broadly, they are still uncertain. I want you to know that I hear you. It is not enough to know that we are moving forward. You have to see it. and feel it in your own life, around your kitchen table and in your checkbooks. “
Stocks fell on weaker-than-expected job numbers and fears the higher unemployment rate could convince the Fed to step up its reduction measures.
In response to the November report, Commerce Secretary Gina Raimondo told CNBC that investors should get the big picture, not a specific month. Job growth so far this year has exceeded 6.1 million. The average monthly gain of 555,000 jobs in 2021 (excluding November) positions the US economy for a full recovery from the pandemic – a return to the February 2020 unemployment rate of 3.5% – by the end of 2022.
This is sooner than many economists predicted.
Sectors with the largest gains in November include professional and business services (90,000), transportation and warehousing (50,000) and construction (31,000). Even as the holiday shopping season approaches, retail trade is down 20,000. The government has added 10,000 total jobs.
Workers’ wages rose for the month, increasing 0.26% in November and 4.8% from a year ago. Both figures were slightly lower than estimated.
Still, economists generally shared the president’s view that November’s employment data overall contained more good news than bad news.
“We’re heading into the holiday season in great shape,” Biden said.
— CNBC’s Jeffrey Cox contributed to this report