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Spike In Coronavirus Cases Slows Job Growth


The winter spike in coronavirus cases is pouring ice-cold water on the nation's economic recovery. Today we learned that U.S. employers added just 245,000 jobs last month. That's less than half the hiring we saw in October. And this slowdown comes as new coronavirus infections are soaring. This bleak jobs report could add urgency to congressional negotiations over a new pandemic relief package. NPR's Scott Horsley is here to talk with us about this. Hi, Scott.

SCOTT HORSLEY, BYLINE: Good afternoon, Ari.

SHAPIRO: So we've seen this steady slowdown in new jobs since the summer, but last month it was really sharp. What happened?

HORSLEY: Yeah. The recovery collided with this fresh surge in coronavirus infections, and that really put the brakes on job growth, especially in those businesses that depend on bringing people together. Bars and restaurants, for example, lost 17,000 jobs last month. I talked to Cameron Mitchell, who runs dozens of sit-down restaurants in 13 states. You know, he was hanging on back in August and September thanks to a lot of outdoor dining. But as the temperatures dropped, so did sales. And then when COVID hospitalizations took off, his business really collapsed. Right now sales are barely a third of what they were this time last year.

CAMERON MITCHELL: You know, our managers are working for reduced pay. Our hourly people are not getting the hours they want, or they're laid off. And our company is losing a million to $2 million a month. And, you know, we can't sustain for much longer.

HORSLEY: And a lot of businesses are in the same boat. The unemployment rate actually inched down a bit in November to 6.7%, but that's only because some 400,000 people got discouraged and gave up looking for work.

SHAPIRO: And this is usually a time of year when people are out spending a lot of money, which is good for the economy. I mean, was there any bright spot at all in today's jobs report that you can point to?

HORSLEY: Not a lot. Retailers cut 35,000 jobs last month during what, as you say, is ordinarily the start of the holiday shopping season. People are still shopping, you know, largely from home. Amazon and other e-commerce companies added 82,000 delivery drivers last month along with 37,000 warehouse workers. Senior economist Daniel Zhao, who's with the online job site Glassdoor, says the virus is really accelerating what is a long-term shift in the retail landscape.

DANIEL ZHAO: Even though there's a pandemic going on, the holidays aren't canceled. Just like Americans might be video chatting family this year instead of going in person, they're shifting their shopping for gifts online.

HORSLEY: You know, health care did see some job growth last month, but overall, Zhao says job openings were down in most industries and in most parts of the country.

SHAPIRO: So what does this mean for Congress? Is this going to light a fire under lawmakers to actually try to get another coronavirus relief package across the finish line?

HORSLEY: The warning signs are certainly flashing if anyone on Capitol Hill is paying attention. One of the sticking points in the negotiations so far has been whether to provide aid to state and local governments. Those governments have cut 1.3 million jobs over the last year. Federal Reserve Chairman Jerome Powell reminded lawmakers this week that layoffs by state and local governments really prolonged the last recession, and he said that's something Congress ought to consider.


JEROME POWELL: State and local governments are one of the very largest employers in the country, and they provide those critical services. I think that's a worthy place for you to look in terms of where support might be appropriate.

HORSLEY: In general, congressional Democrats have been eager to help state and local governments, while Republicans have been resistant even though some of the states facing the biggest revenue drops have been red states with GOP governors.

SHAPIRO: In addition to state and local government help, Congress is looking at help for small businesses and unemployed people. What can you tell us about that?

HORSLEY: Yeah, it's pretty clear they're going to need the help. Cameron Mitchell told me that the emergency loan he got from the government earlier this year was a lifeline, keeping his restaurants afloat during the spring and summer. And he's desperate now for some additional help to get him through the winter.

MITCHELL: The good news is we know recovery is on its way, you know, with the vaccines. There's been statements that America will be vaccinated by May. Well, we just need to get from here to there. And Congress needs to help provide that bridge.

HORSLEY: And millions of unemployed workers are in a similar situation. A lot of them are set to lose their emergency benefits right after Christmas.

SHAPIRO: NPR's Scott Horsley, thank you.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.