The tempo of employment progress is more likely to have slowed in November because of the influence of virus outages

Employment growth in November is likely to be weaker than in October. This reflects the effects of virus-related shutdowns by states and municipalities due to the record spread of Covid-19.

Economists expect a consensus of 440,000 non-agricultural workers to join in November and the unemployment rate to have fallen from 6.9% to 6.7%, according to the Dow Jones. The total number of payrolls is likely to be hit again by a significant decline in government jobs, driven by federal government layoffs of census workers and cost reductions at the state and local levels.

November could also be the final month with significant job gains through the middle or end of the first quarter, if large numbers of Americans were to be vaccinated. Pfizer is expected to begin delivering its vaccine later this month, once FDA approval is received, and Moderna is expected to receive approval soon after.

The employment report will be released on Friday at 8:30 am ET.

638,000 new jobs were added in October, but government payrolls lost more than 260,000 jobs. There’s a wide range of forecasts for November, with Bank of America expecting only 150,000 total and an additional 700,000 employees.

“What we don’t know is when the restrictions began to take effect,” said Michael Gapen, chief US economist at Bank of America. Many states have had travel advisories urging visitors to quarantine, and some have restricted indoor and outdoor activities to limit spread. Los Angeles, for example, introduced new home-stay rules this week, and California may announce more state-wide restrictions.

“They started around the middle of the month,” Gapen said of the latest round of restrictions. He noted that the mid-month government poll week for the job report may be affected by the stalemate. Gapen expects a total of 550,000 payrolls to be added, including the loss of 100,000 census workers and 50,000 others from state and local governments.

“We believe the risks to our forecast are on the downside,” he said. He believes the manufacturing and construction of goods will see hiring growth, but analysts don’t expect a normal increase in seasonal retail and hospitality jobs this year.

“Fortunately, people are still spending. They just make more of it online,” said David Berson, Nationwide’s chief economist. “There are a lot of non-internet companies doing things online. They had to hire people and that will help take some of what we think will be a pretty big drop in retail sales over the next month.”

Berson said the negative impact of the lack of attitudes for the holidays is likely to show up in the December report, which usually reflects the seasonal attitude. Between this and the virus-related shutdowns, jobs can be lost.

“December is the month we think the employment number could most likely be negative, but it’s still temporary,” said Berson.

Gapen expects the weakness to continue into December. “We suspect December and January are pretty weak months,” he said.

“Our growth forecast for the first quarter is zero,” said Gapen. “We have short-term pain ahead of us. We don’t think it will go far beyond the first quarter if all the news about the vaccine schedules is correct. Things will be much better by the end of the first quarter.” . “

Bank of America economists expect 150,000 employees to be hired in November, and they also warn that the unemployment rate may rise, not fall, as the market expects.

“Additionally, the surge in Covid-19 cases could temporarily pull workers out of the labor force and put pressure on the unemployment rate. If that were realized, it would be the first month since the peak of the pandemic that the unemployment rate did not. ” That said, the outage should prove temporary as we expect the unemployment rate to reach 5.1% by the end of 2021 due to solid growth of 4.5%. “

Jefferies economists also expect the unemployment rate could rise in November. “Honestly, it’s hard to imagine a particularly strong report that will be released on Friday,” they wrote. They predict that 340,000 people were hired in November.