'The labor market got a little bit worse in November. And December likely to be even worse,' said a leading economist.
The economy added just 245,000 new jobs in November, the Bureau of Labor Statistics announced on Friday.
That number is down from the 610,000 jobs added in October, marking the fifth month straight of slowing job growth.
The unemployment rate, which stands at 6.7% — a full 3 percentage points higher than it did in January 2020 — was unchanged. And the real unemployment rate is likely much higher than that, as millions of workers have dropped out of the labor force altogether.
Jason Furman, a professor of economics at Harvard who served in the Obama administration as chair of the Council of Economic Advisers, estimates that what he calls the "realistic" unemployment rate is actually 8.5%: "The realistic UR adjusts for a misclassification error & the unusually large decline in participation. ... The labor market got a little bit worse in November. And December likely to be even worse," he tweeted.
10.7 million people remain unemployed, with the number of people who have been unemployed for six months or longer skyrocketing.
"We're at risk of creating more lasting problems: The share of the unemployed who have been jobless >6 months has now risen from 19% in February to 37% in November, and it's rising sharply. As people lose contact with the labor market, they lose connections, skills, and hope," tweeted Justin Wolfers, an economics professor at the University of Michigan.
As has been widely reported, Senate Republicans have been refusing to pass virus relief measures for months.
Led by Majority Leader Mitch McConnell, Republicans in the Senate let a $600 per week unemployment boost expire in July — a boost economists said helped stave off an even worse economic crash in the early days of the pandemic.
Additional unemployment benefits are set to expire just after Christmas if Republicans refuse to act, which could cause 12 million workers to lose a critical lifeline.
House Democrats have passed two bills that extended that $600 weekly benefit to jobless workers and authorized new direct payments to Americans earning under a certain income threshold. But Senate Republicans refused to vote on those measures.
With the economic recovery now stalling, Republicans appear to be realizing that they need to do something, but their offer is stingy.
The GOP offer wouldn't revive any added boost to weekly unemployment payments nor add any new direct payments.
McConnell's bill instead includes liability protection for businesses that operate during the pandemic, and a tax write-off for business meals, known as the "three-martini deduction," a policy economists say will have no impact on the economic situation.
Published with permission of The American Independent Foundation.