Employment increased by 245,000 jobs in November, the U.S. Bureau of Labor Statistics reported Friday, marking the slowest month of job growth since the spring and far less than the 610,000 jobs added in October and the 711,000 added in September. Job losses occurred in accounting and bookkeeping and other sectors amid the ravages of the COVID-19 pandemic.
Nevertheless the unemployment rate dipped two-tenths of a percentage point to 6.7 percent. While the 245,000 jobs would have been a good sign of growth last year, they represent a continued slowing of the pace of job growth after millions of job losses at the start of the year. The main job gains in November happened in the transportation and warehousing, professional and business services, and health care sectors. Employment declined in government and retail trade. While professional and business services gained, the accounting and bookkeeping area lost 2,400 jobs. Employment in professional and business services increased by 60,000, with about half the gain occurring in temporary help services, where 32,000 jobs were added. Professional and business services employment has declined 1.1 million since February.
“With the rise in cases and lack of stimulus, we expected that the hiring would begin to slow,” said Phil Noftsinger, executive vice president of CBIZ, a Top 100 Firm. “That’s unfortunate because we probably had an opportunity to arrest that a bit if we had acted sooner in terms of stimulus. Generally in the professional services category you saw the unemployment rate tick down. It’s just under 6 percent now. That sector is usually pretty strong and is usually in better shape than the overall group.”
Joshua Ronen is a professor of accounting at New York University Stern School of Business and co-editor of the "Journal of Law, Finance, and Accounting." Professor Ronen teaches courses in managerial accounting, financial accounting, advanced topics in financial accounting, and financial statements analysis. Ronen has been with NYU Stern for nearly 45 years. His primary research areas include capital markets, disclosure, earning management, economic impact of accounting rules and regulations, financial reporting, legal liability of firms, transfer pricing, agency theory, corporate governance, and fair valuation. Ronen has written numerous books including "Accounting and Financial Globalization," "Off-Balance Sheet Activities," "Entrepreneurship," "Smoothing Income Numbers: Objectives, Means and Implications," and "Earnings Management." He has been published in many academic journals including and publications including The New York Times, The Accounting Review, Journal of Accounting Research, Journal of Accounting, Auditing and Finance, Abacus, Management Science, Journal of Public Economics, Journal of Organizational Behavior and Human Performance, Stanford Journal of Law, Business, and Finance, and Journal of Financial Markets. In addition to his work at NYU Stern, Ronen has lectured at University of Canterbury, Tel-Aviv University, Federal University of Rio de Janeiro, National University of Mexico, University of Toronto, University of Chicago, Hebrew University, and London School of Economics among many others. He has also been a consultant for numerous organizations, including especially law firms as expert witness in the area of securities litigation. His suggestions for reform in the accounting profession have received critical acclaim by legislators and in the media. Ronen received his Bachelor of Arts in Economics and Accounting at Hebrew University in Israel, and his Doctor of Philosophy from Stanford University. Professor Ronen is also a licensed CPA in Israel.
David Silberman is senior advisor at the Financial Health Network and former associate director, research, markets and regulations at the Consumer Financial Protection Bureau.
David Stone is Founder and CEO of RetireOne, an independent platform for fee-based insurance solutions.
The number of long-term unemployed (those who have been jobless for 27 weeks or more) increased in November by 385,000 to 3.9 million, accounting for 36.9 percent of the total number of unemployed, while the number of people who have been jobless 15 to 26 weeks declined by 760,000 to 1.9 million. The labor force participation rate edged down to 61.5 percent in November, or 1.9 percentage points below its February level. Average hourly earnings increased 9 cents to $29.58.
Noftsinger finds the renewal of stimulus talks in Washington an encouraging sign of progress. “It’s not ideal, but I think we’re starting to see the labor numbers begin to peak in terms of getting back to where we were in February in the context of a vaccine, the distribution of said vaccine, the reopening of the economy, and certainly any stimulus that we could find ourselves getting between now and those things happening,” he said.
CBIZ released its own monthly CBIZ Small Business Employment Index on Friday, reporting a 1.06 percent seasonally adjusted decrease for November, despite the job growth that usually occurs during the holiday shopping season. From a geographic standpoint, the West was the only U.S. region to see a hiring increase at 1.36 percent, while the Northeast saw a decrease of 1.79 percent, the Central region declined 1.43 percent and Southeast slipped 0.67 percent. Hiring declined in states that opened on or before May 15 by 1.73 percent and states that opened afterward by 0.97 percent.
Several industries experienced hiring declines, including technology, life sciences, construction, accommodation and food services, and real estate. On the plus side, hiring increased in arts and entertainment, which had experienced depressed trends since the spring. Noftsinger wasn’t sure how to explain the job growth in that sector. Hiring grew among nonprofits as well.
“There were some surprises in our metric,” said Noftsinger. “I would point to accomodation and food services, which had a strong bounce as restaurants and bars opened. That decline is indicative of some of the closures taking place in larger metropolitan areas. We’re starting to see that play out in those numbers. I would expect that to accelerate as we go into December and the cases continue to rise and the closures continue to happen.”
