By Sarah Chaney Cambon 

The U.S. economy likely continued to regain jobs in November, though forecasters project the pace slowed amid rising Covid-19 infections and new business restrictions.

Economists surveyed by The Wall Street Journal forecast that employers added 440,000 jobs in November, down from the 638,000 jobs added in October. They project that the unemployment rate declined slightly to 6.7% from 6.9% in October.

Job growth has slowed each month since June and the economy faces near-term challenges, including a new surge of coronavirus infections that triggered some states and localities to impose new restrictions on business. The onset of winter could deter spending and job creation in sectors like restaurants that have become more reliant on business outdoors.

Still, the labor-market recovery from the pandemic's job destruction this spring has been stronger than most economists forecast. Many expect widespread vaccine distribution to eventually help lift the economy as businesses are allowed to reopen and consumers feel more comfortable traveling, going to the movies and returning to other in-person activities involving proximity to other people.

"As infection rates go down, as the number of people vaccinated goes up, then we'll start to see...business activity expand at a faster rate, and we will see the employment numbers pick up more strongly," said David Berson, chief economist at Nationwide Mutual Insurance Co.

The labor market has regained slightly more than half of the 22 million jobs lost at the onset of the pandemic. The economy overall also has recovered much of the ground lost earlier this year, even though the expansion has slowed since the third quarter's rebound. U.S. consumers boosted their spending in October for the sixth straight month, and new applications for unemployment benefits -- a proxy for layoffs -- fell last week after a recent jump.

Aliana Heffernan of Rahway, N.J., age 28, began casually exploring job opportunities in mid-April, after she was furloughed from her marketing-specialist role at a New York City ad-tech firm. In June, her furlough turned permanent, and she kicked the pace of her job search into high gear, sending out dozens of applications each day. The search, she said, was "brutal."

"It wasn't hard to find positions that were a good fit. But most of the time I would find great jobs and never hear a word," said Ms. Heffernan. "In more than one instance, I interviewed on the phone and then was ghosted."

The outlook brightened in late October, when an advertising startup that she had interviewed with in early July got back to her with an offer. Ms. Heffernan reported for her first day on the job Nov. 2. The new position, which is fully remote until further notice, is a step up from her previous job in terms of title, responsibilities and compensation, she said.

Holiday hiring strengthened in November compared with a year earlier, according to job site Glassdoor. The gains were driven by demand for e-commerce jobs.

"There's still holiday hiring, it's just not as we know it," said Becky Frankiewicz, president of staffing firm ManpowerGroup North America. In previous years, the company would be placing workers in jobs like cashier, clerk or salesperson inside retail stores, she said. But during this holiday season, openings are concentrated in roles like delivery driver and warehouse worker, she said.

More broadly, however, the Glassdoor job-openings data suggest hiring has slowed since October as states navigate a surge in virus cases. Openings in an array of industries, such as technology and food services, were down in November from a month earlier.

The number of weekly labor shifts among workers increased 0.1% in November, down from 0.8% growth in October, according to Ultimate Kronos Group, a workforce-management software company. Worker shifts fell month over month in the Midwest and Northeast, possibly reflecting new business restrictions in those regions as virus cases increase.

Economists say there are persistent risks of labor-market scarring, as many Americans are seeing their temporary furloughs turn permanent. In October, 3.7 million Americans said they were unemployed due to a permanent job loss, up from 1.3 million in February, according to the Labor Department.

Many individuals, facing increased child-care responsibilities or limited job opportunities have stopped looking for work altogether during the pandemic. The labor-force participation rate, or the share of Americans working or looking for work, was 61.7% in October. That is up from April's trough, but remains near the lowest level since the 1970s.

Lon Hoyt, age 62, played the keyboard in the Broadway musical "Ain't Too Proud" in March before the coronavirus forced theaters to close. Mr. Hoyt, who has made a career of directing and playing music on Broadway, said he hasn't been looking for a new job because theaters remain shut down. Instead, he is spending time practicing the piano, cooking and cleaning, or, as he puts it, becoming "a domestic god."

Mr. Hoyt intends to return to Broadway once widespread vaccine distribution allows people to attend live entertainment again without worrying about infection. This period of joblessness has been a double-edged sword, he said.

"You can relax, but there's also depression that there is no next gig as of now," Mr. Hoyt said. "The only thing that's helping is my wife is continuing to work. My friends and I have said we're on wife support."

Gwynn Guilford contributed to this article.

Write to Sarah Chaney Cambon at sarah.chaney@wsj.com

(END) Dow Jones Newswires

December 04, 2020 05:44 ET (10:44 GMT)

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