Job Creation Slows

November nonfarm payrolls rose by 245k, significantly less than the 460k expected, according to Bloomberg. October payrolls, were revised down from a 638k rise to 610k, and September payrolls were revised higher from a 672k rise to 711k. The net change in nonfarm payrolls (November data + revisions) was a 256k rise. Employers have added 12.3M jobs since May, slightly more than half of the 22.2M jobs lost in March and April.

This week’s data indicates improvement in the U.S. jobs market with a larger-than-expected decline in weekly jobless claims and the November employment report showing an addition of hundreds of thousands of new payroll jobs, the seventh consecutive month of positive job creation. The pace of job creation, however, has slowed noticeably from the pace seen in the fall. Nearly 10M Americans remain unemployed and millions more are reliant on federal unemployment assistance. With federal assistance and forbearance opportunities set to expire at year-end, and increasingly onerous restrictions and lockdown measures coming, further job losses and business closures are expected. This scenario paints an increasingly difficult scenario for households and workers.

Financial markets see the news for its impact on Fed policy. A weak jobs market makes it more likely the the Federal Reserve will act aggressively at it December meeting. Expectations are that the Fed will increase the duration of its bond-buying program. The Fed’s balance sheet has risen by more than $3 trillion in 2020 alone. See FRB data above.