; Small Decline in Unemployment Rate

The U.S. economy added 245,000 jobs in November; this is well below the consensus expectation for an increase of 485,000. After an initial flurry of hiring in May and June when businesses reopened, job growth has slowed for five straight months. Job growth in October was revised somewhat lower, to 610,000 from 638,000, while September job growth was revised higher, to 711,000 from 672,000.

Private-sector hiring was better in November, with a net gain of 344,000. There a decline in government employment of 99,000, largely because of the loss of temporary Census jobs; federal government employment fell by 86,000 over the month. Most major private-sector industries added jobs over the month; the exception was a net loss of 35,000 jobs in retail trade, which is suffering from the continued spread of online shopping.

The unemployment rate fell to 6.7% in November, from 6.9% in October. After peaking at 14.7% in April, the unemployment rate has fallen for seven straight months, although it remains well above the 3.5% rate before the pandemic in early 2020.

Average hourly earnings rose a solid 0.3% over the month, while the average workweek held steady at 34.8 hours. With more jobs, higher wages, and a flat work week, there was a solid 0.3% increase in labor market income in November.

The labor market continues to improve, although job growth has slowed dramatically from earlier in the recovery. The U.S. economy lost 22 million jobs in March and April and has since added back 12 million jobs. But after adding an average of 2.7 million jobs per month in May through August, job growth has averaged just over 500,000 per month in September through November. At November’s pace of job growth, employment would not return to its pre-recession peak until early 2024.

Job growth is likely to remain soft in December and the first few months of 2021. With record coronavirus cases consumers and businesses are turning cautious and states are re-imposing restrictions on economic activity, and Congress has been unable to agree on fiscal stimulus. But job growth should pick back up in the spring as vaccines are widely distributed; PNC is also assuming that Congress does agree on a fiscal stimulus package over the next month that supports the economic recovery and the job market.

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.