Gripped by COVID-19 US employers cut back on hiring

Gripped by COVID-19 US employers cut back on hiring

Saturday, December 05, 2020

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WASHINGTON (AP) — With the viral pandemic accelerating across the country, America's employers sharply scaled back their hiring last month, adding 245,000 jobs, the fewest since April and the fifth straight monthly slowdown.

At the same time, the unemployment rate fell to a still-high 6.7 per cent, from 6.9 per cent in October as many people stopped looking for work and were no longer counted as unemployed, the Labour Department said. November's job gain was down drastically from a 610,000 gain in October.

Friday's report provided the latest evidence that the job market and economy are faltering in the face of a virus that has been shattering daily records for confirmed infections.

Economic activity is likely to slow further with health officials warning against all but essential travel and states and cities limiting gatherings, restricting restaurant dining and reducing the hours and capacity of bars, stores and other businesses.

Most experts say the economy and job market won't be able to fully recover until the virus can be controlled with an effective and widely used vaccine. And the picture could worsen before it improves.

“The recovery is not insulated from the effects of the pandemic,” said Daniel Zhao, senior economist at employment website Glassdoor. “This is the calm before the storm. We face a long and difficult winter ahead.”

The jobs slowdown comes at a particularly fraught time. Two enhanced federal unemployment benefit programmes are set to expire at the end of this month — just as viral cases are surging and colder weather is shutting down outdoor dining and many public events.

Unless Congress enacts another rescue aid package, more than nine million unemployed people will be left without any jobless aid, state or federal, beginning after Christmas.

Renewed efforts in Congress to reach a deal have picked up momentum. A bipartisan group of senators has proposed a US$900-billion plan that would include expanded unemployment benefits, more small business loans and aid to state and local governments.

President Donald Trump has voiced support for more financial assistance, though key differences between the two sides remain.

Before the pandemic, last month's job gain would have been considered healthy. But the US economy is still nearly 10 million jobs below its pre-pandemic level, with a rising proportion of the unemployed describing their jobs as gone for good. Faster hiring is needed to ensure that people who were laid off during this spring can quickly get back to work.

There is also evidence that the pandemic is inflicting long-term damage on millions of workers. People who have been out of work for six months or more — one definition of long-term unemployment — now make up nearly 40 per cent of the jobless, the highest such proportion in nearly seven years. The long-term unemployed typically face a harder time finding new jobs.

And the proportion of Americans who are either working or seeking work fell in November, suggesting that many people soured on their prospects for finding a job and stopped looking. That proportion declined to 61.5 per cent, a level that before the pandemic hadn't been seen since the 1970s.

In Columbus, Ohio, Agnes Makohka is unemployed and receiving jobless benefits for the first time in her life.

Makohka, 45, lost her job as a human resources administrator nearly a year ago, well before the pandemic struck. Yet since the virus intensified, it's become much harder for her to find work.

Makohka doesn't have a car. And in April, bus service on her route was temporarily cancelled. She struggled to buy groceries, much less look for work. Since then, Makohka has been scraping by with the help of food pantries and unemployment benefits. But those benefits are set to run out December 26.

“I am a little bit scared now about the help coming to an end because I'm not quite sure what's going to happen,” Makokha said. “If McDonald's will hire me, I will take that job. If anyone will hire me, I would take the job.”

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