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US jobs market recovery slows amid surge in Covid-19 cases

<span>Photograph: Nam Y Huh/AP</span>
Photograph: Nam Y Huh/AP

The recovery in the US jobs market collapsed in November as cases of Covid-19 hit new records, government figures revealed on Friday.

The US added just 245,000 new jobs in November, less than the 638,000 jobs added in October, the 672,000 jobs added in September and the 1.4m jobs added in August. The unemployment rate fell to 6.7%.

Jobs growth has now slowed month on month since June and the latest report highlighted another worrying trend – the growth in long-term unemployment. In November, the number of long-term unemployed (those jobless for 27 weeks or more) increased by 385,000 to 3.9 million, accounting for 36.9% of the total unemployed.

Related: ‘Bills or food’: crisis mounts for unemployed Americans

The unemployment rate has fallen sharply from a record high of 14.7% in April but is still 3.2 percentage points higher than it was in February, before the coronavirus struck the US.

The downturn also continues to disproportionately affect people of color. The unemployment rate for black Americans was 10.5% in November, for Latinos it was 8.4% and for whites 5.9%.

November’s figures were dragged down by the end of temporary hiring for the government’s latest census, which accounted for the loss of 96,000 jobs. But other sectors also lost jobs, notably retail, which shed 35,000 jobs, and food services and drinking places, which lost 17,000 positions.

The slowdown comes as Congress continues to argue over the size of a new stimulus package and millions of Americans face the expiration of unemployment benefits agreed to when Washington signed off on the last stimulus package in March.

Janet Yellen, incoming president Joe Biden’s pick for Treasury secretary, warned this week that there would be “more devastation” if action is not taken soon.

“It’s an American tragedy and it’s essential that we move with urgency. Inaction will produce a self-reinforcing downturn, causing yet more devastation,” Yellen said.

Surging rates of Covid 19 infections have led to cities and states across the US reinforcing quarantine measures and placing limits on non-essential businesses. Across California, new stay-at-home orders have been implemented as the governor worries a surge in patients may swamp the state’s healthcare system. Los Angeles county, where restrictions were announced on Wednesday night, reported a record 7,593 new cases on Tuesday.

The figures from the bureau of labor statistics come after another disappointing report from ADP, the US’s largest payroll provider. ADP’s latest monthly tally of the number of new jobs created showed private payrolls grew by 307,000 in November, a decline from the 404,000 the previous month.

“While November saw employment gains, the pace continues to slow,” said Ahu Yildirmaz, vice-president and co-head of the ADP Research Institute.