President-elect Joe Biden advised the US Congress to acquire an all new economic relief plan after the release of a report that showed the unemployment rate dropped to 6.7% in November due to the advancement of the pandemic.
The US economy created 245,000 jobs in November, according to the Department of Labour, a number well below expectations.
And although the unemployment rate fell from 6.9% to 6.7% in a month, its highest rate since the pandemic pulverized the labor market, there are still 10.7 million unemployed, to which are added people who stopped looking for work.
Faced with this scenario, Biden, who takes office on January 20th, warned that we must act immediately.
“If we don’t act now, the future is going to be very bleak. Americans need help now,” said the president-elect, who called on Congress to reach an agreement expeditiously.
The unemployment rate is eight points below the maximum reached during the pandemic in April, but it is still 3.2 percentage points above the level before the arrival of the virus.
“These improvements in the labor market reflect the continuous resumption of activity”, indicated the authorities, who qualified their message noting that the rate of improvement “has moderated in recent months.”
Analysts had expected 650,000 jobs to be added to the market last month, but several economists had already warned that this number could be much lower due to indicators that hiring was slowing due to the advance of the virus.
This scenario raises concern among experts, since the virus advances without control in the United States, the country with the most deaths from the pandemic, which left 210,000 infections in one day on Thursday.
Another worrisome data is the number of long-term unemployed – who have been without activity for 27 or more weeks – and that in November rose by 385,000 to a total of 3.9 million people.
Another edge of the crisis is that more and more people are leaving the job market. According to the report, the participation rate fell to 61.5% of the working-age population, representing a fall of 1.9 percentage points from the pre-crisis level.
For the Oxford Economics consultancy, this Friday’s data reflects a “cooling down in hiring and a still very high number of new unemployed.”
There is a consensus among economists on the need for a new economic stimulus plan.
Federal Reserve Chairman Jerome Powell warned that “a difficult few months” are coming.
Gregory Daco, Oxford Economics, indicated that a new aid scheme for the unemployed and for companies would be a “lifeline” for the economy, and warned that without these aid the situation could deteriorate.
“We fear that the next few months will be difficult for the economy, with downside risks due to the imminent expiration of unemployment benefits for millions of Americans and the end of the moratorium on evictions,” he added.