In a bit of a letdown, the U.S. economy added back fewer jobs than expected in November. On the plus side, the unemployment rate fell further than anticipated reaching the lowest level since the start of the pandemic.
Economists had predicted better - far better, in fact.
Non-farm payrolls grew by 210,000. The prediction had been for more than double that, at 550,000. The unemployment rate hit 4.2%, where economists had planned on 4.5%.
The miss was largely driven by the newest pandemic twist, as the highly infectious Omicron variant hit the headlines and governments scrambled to adapt to a potentially potent new variant.
"The headline miss was largely due to a muted 23,000 rise in leisure and hospitality payrolls, indicating that the nascent winter wave of virus infections was now weighing on the sector. With new cases now on the rise again even before the potential impact of the Omicron variant, leisure sector employment growth looks set to remain weak over the winter," Andrew Hunter, senior U.S. economist for Capital Economics, wrote in a note on Friday.
"Moreover, we remain skeptical that a further significant recovery in the labor force lies ahead – particularly given the worsening virus situation and the potential Federal vaccine mandate," he added.
On the plus side, while job growth appeared to lose momentum after stronger hiring in September and October, hiring figures for those months were revised upwards. With a bit of luck this is a blip driven by the variant.
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