Biden says US is ‘back to work’ after unemployment rate falls

Bloomberg

President Joe Biden said Americans are returning to work and the US economy continues a strong rebound from the pandemic, after a Labour Department report offered a mixed view on the job market.
“Simply put, America, America is back to work,” Biden said in remarks at the White House. “Because of the extraordinary strides we’ve made, we can look forward to a brighter, happier New Year, in my view.”
The country recorded this year’s weakest gain yet in payrolls in November, but increases in each of the two previous months were revised upward and the unemployment rate falls more than forecast to 4.2%.
Nonfarm payrolls climbed 210,000, less than half the median forecast, while the labour force participation rate edged up to 61.8%.
Biden acknowledged widespread anxiety about economy, driven by higher than normal inflation. Recent polls have shown that most Americans believe that the country is headed in the wrong direction and that the economy isn’t in good condition — perceptions the president continues to try to change by pointing to favourable economic data like job and wage gains.
“It’s not enough to know we’re making progress,” Biden said. You need to see it and feel it in your own lives around
the kitchen table and in your checkbooks.”
The annual pace of inflation exceeded 6 percent in October, the fastest in three decades. Many economists say that unprecedented US consumer demand for material goods is the culprit, a phenomenon that’s also contributing to supply-chain logjams. But Biden said American families are doing better than they may realise.
“Even after accounting for rising prices, the typical American family has more money in their pockets than they did last year,” he said.
The monthly US jobs report is composed of two surveys — one of employers and the other of households. The employer survey, which determines payroll and wage figures, showed hiring slowed across industries, including declines at automakers and retail outlets. The household survey, which determines the jobless and participation rates, showed employment surged by 1.14 million people and many people came off the sidelines.
US Payrolls Growth Slowed in November
US job growth registered its smallest gain this year while the unemployment rate falls, offering a mixed picture that may nevertheless push the Federal Reserve to quicken the wind-down of pandemic stimulus.
The median estimate in a Bloomberg survey of economists called for a 550,000 payrolls gain and for the jobless rate to fall to 4.5%. The S&P 500 reversed earlier gains, with losses led by tech stocks. The dollar rises, while yield on the 10-year Treasury edged lower.
Job growth could be further restricted if the recent emergence of the omicron variant of the coronavirus leads to new restrictions and keeps people from looking for work. Payrolls still remain 3.9 million below pre-pandemic levels.
While the headline number disappointed, the drop in the unemployment rate and the rise in labour force participation could help keep the Fed on track to possibly tighten policy faster than planned as inflation proves more persistent previously thought.
The central bank’s dual mandate requires that it weighs both price stability and maximum employment, and some policy makers fear that cutting off monetary support too soon could hurt the jobs recovery.
Average hourly earnings rise 4.8% in November from a year ago, though those figures are not adjusted for inflation. The average workweek rose to 34.8 hours in November from 34.7 hours a month earlier.
Employment in leisure and hospitality posted a small gain after large increases earlier in the year. Health care job growth was little changed overall, while nursing and residential care facilities continued to lead the decline in the industry’s employment throughout the pandemic.
Sectors such as professional and business services, transportation and warehousing, construction and manufacturing posted notable job gains. Such hiring could help ease supply-chain bottlenecks.
The household survey showed those entering the labor force quickly found work. Nearly 5 million people, the most since May of last year, went from out of the labor force to employed in November.
The unemployment rate for Black Americans fell by the most since October 2020, however that likely reflects a decline in labor force participation. The participation rate fell by 0.3 percentage point to the lowest since July.