U.S. Jobs: November Dip Suggests Slowdown Ahead

After a momentary pause in October, I'm back to weighing the series of numbers that the U.S. Bureau of Labor Statistics has reported in its previous nine Employment Situation Summaries. Consider this sequence, please:

March: -701,000
April: -20,800,000
May: +2,725,000
June: +4,791,000
July: +1,761,000
August: +1,489,000
September: +711,000
October: +610,000
November: +245,000

If you chart out the sequence from June through November, excepting October, each new month packs somewhere around half the jobs added oomph of the month that precedes it. This is a pronounced downward trend. It also leads into negative territory sooner rather than later, if the trend persists.

On a purely mathematical basis, negative numbers — which in this case would signify jobs lost, not gained — seems somewhere between likely and inevitable either in January or February. Curve-fitting this set of numbers is a little challenging, as the shape of the current bar chart shows.

Take a look:

Here's why: If we toss out August and October as outliers, then the trend line plunges immediately into the negatives. If we leave them in, though, then it seems to gradually tail off toward zero with no obvious inclination below the x-axis (the zero line).

But Wait: This Is More Than Just a Numbers Game

It's not hard to see the impact of the recent resurgence of COVID-19 as involved in the November numbers. NPR describes the phenomenon starkly as "U.S. employers sharply scaled back their hiring last month, as the coronavirus pandemic put new pressure on restaurants, retailers and other businesses."

The Washington Post concurs, and calls the November numbers "a worrisome sign" of things to come as the economy contracts in the face of massive growth in infection rates nationwide. It is starting to feel like the economy is about to slide into a precipice. Let's hope now, while we look at the detail from the latest Employment Situation Summary to see what its contents disclose.

The first sign of trouble in these numbers is that the only one of them over 100,000 for November is in transportation and warehousing: 145,000 jobs added overall, with 82,000 in couriers and messengers, and 37,000 in warehousing and storage. None of the other sectors breaks the 60,000 mark, as you can see:

Professional and business services is up by 60,000, with a little more than half that number — 32,000 — in temporary help services.

Healthcare is up by 40,000, with physician's offices up by 21,000, home healthcare services adding 13,000, and other health practitioner offices picking up 8,000.

Nursing care facilities continue to drop, down by 12,000 for November.

Leisure and hospitality is up by 31,000 for November, but still trails way behind February's levels by 3.4 million jobs.

Construction gained 27,000 for November, with residential specialty trade contractors up 14,000, and heavy and civil engineering up 10,000.

Manufacturing likewise gained 27,000 last month, with 15,000 in motor vehicles and parts, and 5,000 in plastics and rubber products.

Financial activities grew by 15,000 jobs in November, with 10,000 in real estate, and 8,000 in "nondepository credit intermediation."

Wholesale trade is up by 10,000 for November.

Government employment continues down, with 99,000 jobs lost in November — 93,000 of those were temporary 2020 Census workers.

Retail trade is down 35,000 jobs, unusual at a time of year when many/most retailers are adding staff to handle the holiday buying season. This is an area where the pandemic is having a clear and unmistakable impact, as most viable retail businesses move more fully into online sales and delivery of goods, rather than in-store shopping.

The other remaining sectors — including our home sector of information — are little changed for November, including also mining and other services.

These numbers show me an employment market that is either stalled for the moment, or simply holding its breath before moving one way or the other. Given current infection rates, an increasing number of social and business restrictions in many states, and at least six months before widespread vaccine administration can make a dent in danger levels, I fear what lies ahead.

Let's hope the upcoming months do not include a hard crash, nor the loss of too many essential moving pieces in the economy. I have no doubt at least some airbags will deploy. As usual, though, only time will tell. Stay tuned.