Total nonfarm employment in America rose by 245K payrolls in November, according to a report out this morning from the Bureau of Labor Statistics. That was well below the consensus forecast but the September and October figures were revised higher by a net 11K payrolls. As for joblessness, the official unemployment rate (U-3) fell for the 7th consecutive month to a recovery low of 6.7 percent. More granular data released by ADP this week confirmed that the pace of the labor market recovery continued to slow in November, but also that hiring at small- and medium-sized businesses (SMBs) appears to have held up rather well. In fact, roughly 8 in every 10 private-sector payrolls added to the economy last month were created by firms with fewer than 500 employees. The rate of hiring has indeed moderated at SMBs recently, due in large part to the winter wave of the pandemic and elevated economic uncertainty, but not nearly as much as what has occurred at large companies, e.g. November’s payrolls increase at big businesses was 76 percent below the average of the prior three months.
A separate report from Challenger, Gray & Christmas similarly showed that corporate layoffs totaled 64,797 in November, up 45 percent compared to this same period last year. The majority of cuts last month occurred in the entertainment and leisure sector, which also leads all other industries year-to-date. Moreover, 857,620 of the 2,227,725 corporate layoffs announced in 2020 have occurred in the entertainment and leisure arena as these businesses remain the most directly hurt by lockdowns and other lingering activity restrictions, and in turn this is the sector most eager for a widespread vaccine rollout. The only areas that have announced fewer job cuts compared to year-ago levels are chemical, financial, pharmaceutical, and utilities firms. The report’s authors encouragingly added that “more companies are rewarding their employees with bonuses this year than last year” because “the employers who were able to retain their workforces and are, so far, weathering the pandemic recognize the importance of rewarding their teams, despite not being able to predict exactly what will happen next year.” Of course note that they alluded to the fact that any positive sentiment has likely been at least partially exaggerated by survivorship bias or silent evidence, i.e. many of the companies that cannot afford to provide bonuses this year may not even be around anymore to participate in these monthly surveys.
Sources: Econoday, U.S. DoL, ADP, CG&C, FRBSL