Here’s what you need to know:
The American economic recovery continues to slow, stranding millions who have yet to find a new job after being thrown out of work by the coronavirus pandemic.
The latest evidence came Friday when the Labor Department reported that employers added 245,000 jobs in November, the fifth month in a row that the pace of hiring has tapered off. The figure for October was revised downward to 610,000, from the initially stated 638,000.
The unemployment rate in November was 6.7 percent, down from the previous month’s rate of 6.9 percent. But that figure does not fully capture the extent of the joblessness because it doesn’t include people who have dropped out of the labor force and are not actively searching for work.
By Ella Koeze·Unemployment rates are seasonally adjusted.·Source: Bureau of Labor Statistics
November’s job totals were dragged down in part by the loss of 93,000 temporary census workers who are no longer needed now that the official counting has wound down.
More than half those knocked out of a job early in the pandemic have been rehired, but there are still roughly 10 million fewer jobs than there were in February. Many people in that group are weeks away from losing their unemployment benefits, as the emergency assistance approved by Congress last spring is set to expire at the end of the year.
“We’re in an unusual position right now in the economy,” said Ernie Tedeschi, an economist at the accounting firm Evercore ISI. “Far off in the distance there is sunlight” because of progress on a vaccine, he said, but until then, “we’re going to have a few of the toughest months of this pandemic, and there will be a lot of scars left to heal.”
The number of people who have been unemployed long-term is still rising
Share of unemployed who have been out of work 27 weeks or longer
By Ella Koeze·Data is seasonally adjusted.·Source: Bureau of Labor Statistics
Covid-19 caseloads have doubled in the past month, leading to new restrictions and tamping down shopping and other commerce. In much of the country, colder weather is likely to discourage outdoor dining, which many restaurants have depended on. And Congress has been unable to agree on a new spending package to help struggling businesses and households.
Millions of federal student loan borrowers will continue to have a reprieve on their loans through Jan. 31, Education Secretary Betsy DeVos announced Friday, extending a pandemic relief measure that had been set to expire at the end of the month.
The extension avoids what borrowers — and the loan servicers that handle their accounts — feared would be a messy disruption between the end of President Trump’s administration and the start of President-elect Joseph R. Biden Jr.’s term.
Mr. Biden has not said if he intends to extend the student loan moratorium, but he has called for limited student-debt cancellation and other relief efforts. The announcement means the moratorium, which has been in place since March, can be extended during the Biden administration with no interruption.
As of Sept. 30, 23 million borrowers had taken advantage of the relief option, suspending payments on $927 billion in debt, according to Education Department data.
The moratorium allows borrowers to skip payments on their federal student loans without penalty and without incurring interest. For those who opt to keep making payments, the entire amount goes toward their loan principal.
The measure covers only federal loans that are owned by the Education Department, which holds the vast majority of all student loans. Borrowers with private loans still need to make those payments.
The moratorium on payments extends to those who have defaulted on their federal loans and are having their wages garnished. Employers have been told to stop garnishing paychecks, Ms. DeVos said, and those who have had money garnished are due refunds.
“The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted,” Ms. DeVos said in her announcement. “The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate.”
Unemployment is falling across demographics
Unemployment rates for Black, Hispanic, Asian and white workers
Unemployment rates for men and women
By Ella Koeze·Rates are seasonally adjusted except those for Asian men and women.·Source: Bureau of Labor Statistics
Distress can be found in nearly every corner of the labor market, but the pain is not evenly distributed.
Joblessness among minority groups was significantly higher in November than the 5.9 percent rate for whites: 10.3 percent of Blacks, 8.4 percent of Hispanics and 6.7 percent of Asians were unemployed.
The jobless rate for women edged down to 6.1 percent from 6.5 percent in October, but a chunk of that decline is because women, much more than men, have taken on family burdens caused by remote schooling and closed child care centers.
Female and Black workers fill a disproportionate share of service sector roles as well as government jobs, which have shrunk significantly since February. In November alone, 21,000 local education jobs were lost.
The pandemic has caused radical changes in the economy and the labor market in a short time. Large sectors of the economy like hospitality, travel and entertainment are floundering, while there have been spurts of growth in others like shipping, technology and cybersecurity that support work and shopping from home.
“The damage is uneven,” said Jed Kolko, chief economist at the job site Indeed. As is the case with most downturns, he said, there are “widening racial and ethnic gaps and more pain for people with less education.”
In other ways, he said, the damage to the labor market is different than in the past, with the loss of so many service jobs hitting bigger cities more.
President-elect Joseph R. Biden Jr. renewed his calls on Friday for Congress and President Trump “to act and act now” to boost the sagging economic recovery, while expressing confidence that further economic pain will bring lawmakers back to the negotiating table for an additional round of aid after he takes office in January.
Speaking in Delaware, Mr. Biden thanked the Republican and Democratic senators who are attempting to negotiate a $908 billion compromise package during the lame-duck session, saying, “This situation is urgent. If we don’t act now, the future will be very bleak.” His statement followed the bleak jobs report for November, which showed U.S. hiring tapering off.
He urged lawmakers to come back for another wave of assistance after Inauguration Day, in part to help hasten the deployment of a Covid-19 vaccine.
“To truly end this crisis, Congress is going to need to fund more testing as well as a more equitable and free distribution of the vaccine,” Mr. Biden said. “We’re going to need more economic relief to bridge through 2021 until this pandemic and economic crisis are over.”
Taking questions from reporters after his speech, Mr. Biden avoided answering whether he has spoken with Senator Mitch McConnell, Republican of Kentucky, the majority leader, about negotiations over an aid package. But he said he believed that Republicans would see a need to work with his administration to pass another package this winter, because, he said, “the country’s going to be in dire, dire, dire straits if they don’t.”
Republicans, he said, are “going to find that there’s an overwhelming need as these numbers skyrocket.”
Speaker Nancy Pelosi flashed fresh optimism on Friday that the House and Senate could soon reach a bipartisan deal on an elusive pandemic stimulus plan after she and Senator Mitch McConnell, the Senate majority leader, agreed to try to find an agreement that could be merged with an enormous year-end spending package.
“That would be our hope because that is the vehicle leaving the station,” Ms. Pelosi, Democrat of California, said at a news conference in the Capitol Friday morning, a day after her conversation with Mr. McConnell, Republican of Kentucky. The phone call marked their first conversation since the election.
Though Ms. Pelosi conceded there were still obstacles to an agreement, she insisted there would be “sufficient time” to close a deal before the Dec. 11 government funding deadline. She pointed to lower-than-expected job gains reported on Friday as an added accelerant.
“There is momentum. There is momentum,” Ms. Pelosi said. “The tone of our conversations is one that is indicative of the decision to get the job done.”
Mr. McConnell expressed similar resolve on Thursday, although he stopped short of endorsing the $908 billion outline proposed by a bipartisan group of moderates that Ms. Pelosi has said should be the starting point for talks, instead pressing for a far smaller bill.
Stimulus talks have been stalemated for months, with lawmakers unable to resolve differences over issues like liability protections for businesses, a Republican demand that Democrats have resisted, and providing federal aid to state and local governments, a top priority for Democrats that many Republicans oppose. They are also still struggling to resolve a number of policy disputes in the must-pass bills needed to keep the government funded beyond Dec. 11, though most involved in the process say that a resolution is feasible before the end of the year.
After months of insisting they would not accept a slimmed-down relief bill, Democrats now appear poised to accept less than one third of the spending they initially proposed to prop up small businesses, help the uninsured and jobless, boost state and local governments, and meet immediate public health needs, leaving other priorities unaddressed until President-elect Joseph R. Biden Jr. takes office Jan. 20.
The emerging compromise would revive lapsed federal unemployment benefits at $300 a week for 18 weeks, and provide billions of dollars in funding for small businesses, schools and the imminent distribution of a vaccine.
While a bipartisan group of senators is expected to continue working on finalizing legislative text through the weekend, there remain a number of significant hurdles. The policy divides that have helped derail attempts to reach agreement earlier this year persist even as lawmakers circulate a tentative outline.
Pressed on her reversal, Ms. Pelosi was defensive on Friday, saying her earlier, multitrillion-dollar proposals that the Senate called nonstarters were important parts of a negotiating strategy that may now yield results. She insisted that Mr. Biden’s election and the looming arrival of two vaccines amounted to “a total game-changer.”
“President-elect Biden has said this package would be at best just a start,” she said. “That’s how we see it, as well. It is less money, but over a shorter period of time, and we need to do it to saves lives and livelihood with the hope that much more help is on the way.”
Wall Street continued its climb into record territory on Friday with a small gain, as growing confidence of a deal being struck on Capitol Hill for coronavirus relief outweighed a weaker-than-expected report on the labor market.
“Compromise is within reach,” Senator Mitch McConnell, the majority leader, said on Thursday. Mr. McConnell and Speaker Nancy Pelosi spoke on the telephone on Thursday, their first conversation since the election. Democratic leaders, and some Republicans, have voiced support for a $908 billion framework for aid.
The November jobs report, released Friday, showed a slowing recovery in hiring, with just 245,000 jobs added last month. On Thursday, the government reported that initial claims for state unemployment benefits in the United States dipped last week, after rising for two consecutive weeks.
The S&P 500 rose about 0.9 percent, bringing its gains for the week to 1.7 percent. European stock indexes and most stock markets in Asia had also ended the day in positive territory.
Oil futures also rose slightly, with Brent crude, the global benchmark, just short of the $50-a-barrel mark last hit in early March after major producers reached an agreement on Thursday for a modest increase in production in January. The agreement is a sign that they believe the world’s demand for crude is stirring after a mostly horrendous year for the oil business.
Across the Atlantic, Brexit talks are continuing into perhaps their final weekend. Britain’s transition period for leaving the European Union ends Dec. 31, and it remains unclear if there will be a trade agreement for the new year. Any deal must be approved by the European Council, the bloc’s chief political body, made up of the heads of state of member countries. It holds its last meeting of the year next Thursday.
With lawmakers in Washington signaling that they’re open to a compromise on a long-awaited economic aid plan, an alliance of 300 major public and private sector groups urged Congress to reach a deal.
“There are signs that a once-nascent jobs recovery has markedly cooled — especially at the lower rungs of the income ladder,” the group, called the Covid Relief Coalition wrote in an letter to lawmakers released on Friday. The group includes industry associations representing businesses ranging from retail to hospitality, as well as a number of city, county, and state government associations.
“Millions of jobs and the livelihoods of people who have built their small business for decades are just withering away because Congress has offered no relief since March,” Chip Rogers, president and chief executive of the American Hotel & Lodging Association, who helped spearhead the coalition, said in a statement released with the letter.
The United States Chamber of Commerce also implored Congress on Friday to pass a new aid bill. “The fire alarm is sounding on our economy and the only question is whether Congress will respond,” said the U.S. Chamber in a separate statement.
The business community’s plea comes at a time when virus cases are spiking and after the Labor Department reported that the rebound in the job market slowed drastically in November. House Speaker Nancy Pelosi expressed optimism that the House and Senate could reach a bipartisan deal on an elusive pandemic stimulus plan before the Dec. 11 government funding deadline.
“That would be our hope because that is the vehicle leaving the station,” said Ms. Pelosi at a news conference on Friday.
The Hartford Courant, the Connecticut newspaper that has been in print since 1764, when it chronicled the locals’ dissatisfaction with British rule, is the latest daily that will try to cover the news without a newsroom.
Tribune Publishing, the company that owns the paper, told employees on Friday that it would “close our Broad Street office, with no plan to find us a new one,” the Hartford Courant Guild, which represents editorial employees, said in a Twitter post.
Andrew Julien, the Courant’s publisher and editor in chief, said in an email to staff members that the closing of the physical newsroom was “a decision about real estate needs amid a difficult and challenging time on both the public health and economic fronts.”
Journalists will continue to do their work remotely, he added.
“It won’t change the essence of what we do: Delivering the high-impact journalism readers have come to expect from the Courant and crafting creative solutions that meet the needs of our advertising partners,” Mr. Julien wrote.
Tribune said in a statement that the newsroom would close on Dec. 27.
“Out of an abundance of caution, we do not anticipate having employees that can work remotely coming back into the office at the Hartford Courant for the remainder of the year and into 2021,” the statement said.
It continued: “As we progress through the pandemic and as needs change, we will reconsider our need for physical offices. We will keep employees informed of decisions as they are made.”
Tribune Publishing, which is part-owned by the hedge firm Alden Global Capital, has shuttered a number of its newspapers’ offices over the last few months, with the great majority of its employees working remotely as the death toll associated with the coronavirus pandemic continues to climb.
In August, the company closed the Lower Manhattan offices of The New York Daily News, which was once the largest circulation newspaper in the country. It also shut down the newsrooms of The Morning Call in Allentown, Pa.; The Orlando Sentinel; The Carroll County Times in Westminster, Md.; and The Capital Gazette in Annapolis, Md. A Chicago Tribune office for suburban publications in Aurora, Ill., was also closed.
Alex Putterman, a Hartford Courant reporter and member of the guild, said that staff members were told on Friday that they would have to pick up their belongings before the office shut down for good. He said the staff had been working remotely since March, when the pandemic first took hold in the United States in the early months of the year.
“It really hit hard,” he said in an interview. “We’ve been in that office for decades. We all value having the physical space, we value each other’s company. We had all been hoping we’d be able to return there after the pandemic and this is a big blow.”
“For all we know at this moment,” he continued, “the plan is for us to be remote forever.”
America’s unemployed workers — a large group nine months into the coronavirus pandemic — increasingly report that they have lost work permanently, rather than temporarily.
Job losses are increasingly likely to be permanent
Share of jobs lost each month that are temporary layoffs
By Ella Koeze·Data is seasonally adjusted.·Source: Bureau of Labor Statistics
The share of jobless workers reporting that they are on temporary layoff has dropped in recent months, a trend that continued in November. But as that happens, an increasing portion have said that their layoffs are not expected to be temporary — 44.2 percent in November, up from 40.9 percent in October, based on Bureau of Labor Statistics data released Friday.
The report showed that 25.9 percent of the unemployed in November were on temporary layoff, while others had left their jobs or were entering or re-entering the job market.
To be classified as unemployed on temporary layoff, a person must have a return date or expect to be recalled to their job within six months. Because of the uncertainty tied to the pandemic, people who did not know whether they would be recalled have been counted by the bureau as on temporary layoff.
The danger that the pandemic will inflict lasting damage on the labor market is increasing as millions remain out of work, and as their unemployment appears likely to last until they can find new positions. Spells of joblessness can hurt workers’ résumés and can discourage some applicants, causing them to drop out of the search altogether.
If that happens because of the coronavirus-induced recession, it would probably unevenly hurt Black and Hispanic workers and those with lower education levels. Those groups have suffered heavy job losses as many of the shops, restaurants and other service businesses that disproportionately employ them have closed.
Economic officials have been urging Congress to provide additional economic support to cushion the blow. Several emergency programs, like forgivable small-business loans and expanded unemployment insurance, are about to end or already have.
“Additional fiscal support is essential to bridge past Covid’s second wave in order to avoid labor market scarring, reductions in crucial state and local services, and bankruptcies,” Lael Brainard, a Federal Reserve governor, said in a speech this week.
The Cheesecake Factory misled public investors about its financial situation in the spring, as the coronavirus began to spread and officials imposed restrictions on in-person gatherings, regulators said on Friday.
The Securities and Exchange Commission fined the company $125,000 over the matter. It’s a relatively small penalty, but the Cheesecake Factory — famous for its enormous menu, including more than 30 types of cheesecake — is the first to be penalized over its disclosures during the pandemic.
In regulatory filings on March 23 and April 3, the Cheesecake Factory told investors that its restaurants were “operating sustainably.” In fact, the 294-restaurant chain was losing about $6 million per week and, by its own internal estimates, had only about 16 weeks’ worth of cash left.
And while the company described steps it was taking to cope with the pandemic in its March filing — including borrowing $90 million from a corporate credit line — it did not disclose that it told landlords that it would not pay April rent because of the pandemic.
The S.E.C. said that the company disclosed more accurate information with private equity firms and other lenders that it was negotiating with for a financial lifeline. The regulator said the Cheesecake Factory agreed to settle the charges, without admitting guilt, and had cooperated with the investigation.
“When public companies describe for investors the impact of Covid-19 on their business, they must speak accurately,” Stephanie Avakian, the director of the commission’s enforcement division, said in a statement.
On April 20, the Cheesecake Factory announced a $200 million investment from the private equity firm Roark Capital. The company’s chief executive, David Overton, said at the time that the deal “meaningfully” enhanced the company’s liquidity “to navigate the near-term Covid-19 landscape.”
A representative for the Cheesecake Factory referred to a regulatory filing from the company on Friday acknowledging the settlement.
The food-delivery company DoorDash raised expectations for its initial public offering on Friday, increasing its hoped-for valuation to a new high of $35.3 billion.
In an amended prospectus, DoorDash said it had increased the expected price range for its shares to $90 to $95 each, up from $75 to $85 earlier this week. At the top end of the new range, the company would raise about $3.1 billion in the sale.
DoorDash is one of a number of start-ups to pursue an I.P.O. this year, banking on buoyant stock markets and investor demand for high-growth companies. Other debuts scheduled to price before the end of the year include Airbnb, the games platform Roblox and the e-commerce site Wish.
DoorDash’s new valuation target, billions of dollars higher than it had planned for just a few days ago, shows just how lofty expectations have become. In a private fund-raising round in June, the company was valued at $16 billion.
DoorDash has been pitching prospective shareholders — virtually, through videoconference calls — on its offering this week, touting its enormous platform and growth during the pandemic. The company argues that it stands to be one of the winners of the food-delivery space, even as it currently loses money.
The company is expected to begin trading on the New York Stock Exchange next week, under the ticker symbol DASH.
As the coronavirus pandemic keeps shoppers out of stores and employees working from home, it’s no surprise that some of November’s biggest gains in hiring were in transportation, warehouse and health care jobs.
Employers also continued hiring people in the business and professional services sector.
Becky Frankiewicz, president of the staffing and placement company ManpowerGroup North America, said she had seen signs of energy in the labor market, noting that a survey of all publicly posted jobs showed 11 million openings in November, a million more than the previous month.
Job gains were unevenly spread across industries in November
Cumulative change in jobs since before the pandemic, by industry
By Ella Koeze·Data is seasonally adjusted.·Source: Bureau of Labor Statistics
“We continue to see week-over-week job growth,” Ms. Frankiewicz said. “We’re nowhere near where we were, yet we continue to limp ahead with recovery.”
There is seasonal hiring, she said, but the composition is different than in previous years. Instead of adding in-store retail staff to work cash registers, sales floors and call centers, employers are scooping up people to work in warehouses and to handle customer service calls from home.
Nick Bunker, an economist at the job search site Indeed, said that since the summer, the story had been the same. “While the trend in jobs postings has continued to pick up, the pace of improvement is slower than it was,” he said.
“The trend in postings about 12 percent below where it was last year,” Mr. Bunker said. “It’s much better than at the nadir of the labor market, but labor demand doesn’t seem to be anywhere near back.”
The share of Americans either working or looking for a job — a figure known as labor force participation — fell in November and remains far below levels seen before the pandemic, a sign that the recovery remains incomplete as 2020 nears its end.
The labor force participation rate declined to 61.5 percent last month, down from 61.7 percent in October. In February, before pandemic-tied layoffs started, the figure stood at 63.4 percent.
For workers in their prime working years, defined as 25 to 54, participation is now at 80.9 percent, down from 81.2 percent in October and 83 percent in February.
That labor force participation seems to be stagnating well below its pre-pandemic levels is a cause for concern. In the wake of the 2007-9 recession, labor force attachment for people in their prime working years remained depressed for years, serving as a sort of “shadow” source of would-be workers even as the unemployment rate declined.
It is unclear whether that dynamic will repeat itself following this downturn, which has been very different.
But as the pandemic drags on, workers are again finding themselves on the labor market’s sidelines. That has been especially true for prime-working-age women, who are disproportionately employed in service jobs most affected by efforts to contain the spread of infection and who have been more likely to drop out of the labor market because of family care responsibilities. That has mattered as schools fully or partly close, leaving children at home.
Federal Reserve officials and other economic policymakers are watching figures like labor force participation — and how they are playing out across different demographic groups — as they take stock of the recovery.
“The economic dislocation has upended many lives and created great uncertainty about the future,” Jerome H. Powell, the Fed’s chair, told lawmakers in testimony this week, adding that “we will not lose sight of the millions of Americans who remain out of work.”
Credit: Source link