U.S. Jobs Market Improved In November, But Signs Point Toward Winter Doldrums

The country’s unemployment rate ticked down in the U.S. Bureau of Labor Statistics’ latest figures, from 6.9 percent to 6.7 percent, however, the pace of the labor market’s recovery also showed signs of slowing amidst rising COVID-19 case numbers and a cooling economy. The slowing rate of growth appeared in The Conference Board’s Employment Trends Index (ETI) for November, which increased in November to 98.81, up modestly from 98.32 in October. This is the seventh consecutive month of increases in the ETI, although it remains down 10.2 percent compared to the year-ago level.

Headwind indicators include the Labor Department’s report last week that employers added 245,000 jobs in November—compared to 610,000 new jobs in October—and today it announced that unemployment claims sharply jumped last week.

“The Employment Trends Index increased again in November, but the pace of improvement has moderated compared to previous months,” says Gad Levanon, head of The Conference Board Labor Markets Institute. “The index signals that the recovery of the labor market may be slowing further, or even come to a halt, throughout the winter. A rising number of COVID-19 cases, further potential restrictions on consumers’ mobility and uncertainty around continued government stimulus are risks to a sustained labor market recovery. People working in industries most impacted by restrictions, such as restaurants, travel, accommodation and out-of-home entertainment, will be the most affected over the coming months. As a result, the decline in the unemployment rate may pause during the winter before sharply dropping later in the year after the large-scale vaccination boosts the economy.”

The Conference Board’s ETI aggregates eight labor market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly. November’s increase was fueled by positive contributions from six of the eight components.

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