WASHINGTON: U.S. private payrolls increased less than expected in November as soaring new COVID-19 infections led to a wave of business restrictions, adding to signs of slowing economic activity as a turbulent year winds down.
The slowdown in private hiring in the ADP National Employment Report on Wednesday puts pressure on Congress to agree on additional fiscal stimulus to aid the recovery from the worst recession since the Great Depression.
Republicans and Democrats in Congress remained unable to reach agreement on a fresh relief package on Wednesday, with top Republicans supporting what the Senate’s top Democrats dismissed as an “inadequate, partisan proposal.” President-elect Joe Biden will inherit a struggling labor market and public health crisis when he takes over from President Donald Trump on Jan. 20.
“The rapid spread of the virus across the nation is making it harder to find employment this fall and this puts the entire economic recovery from recession in jeopardy if Congress can’t get it together and vote on a new stimulus package before the end of the year,” said Chris Rupkey, chief economist at MUFG in New York. Private payrolls rose by 307,000 jobs last month after increasing 404,000 in October. Economists polled by Reuters had forecast private payrolls would rise by 410,000 in November. The slowdown in hiring last month was across all industries.
The leisure and hospitality sector, hardest hit by the coronavirus pandemic, added 95,000 jobs. Construction employment increased by 22,000 jobs and manufacturers hired 8,000 workers. There were employment gains in financial activities, professional services, education and healthcare sectors. The information industry added no jobs.
The United States has been slammed by a fresh wave of COVID-19 infections, with 4.2 million new cases and more than 35,000 coronavirus-related deaths reported in November, according to a Reuters tally of official data.
The resurgence in coronavirus infections and expiring fiscal stimulus are hampering consumer spending and production at factories. More than $3 trillion in government COVID-19 relief helped millions of unemployed Americans cover daily expenses and companies keep workers on payrolls, leading to record economic growth in the third quarter.