Lackluster employment growth a sign of tight labor market. Employers added 210,000 personnel in November, below this year’s monthly average of 555,000 jobs. Part of the slowdown was due to modest onboarding in the leisure and hospitality sector. While accounting for roughly 40 percent of all gains made since April 2020, the sector was only responsible for about 10 percent of November’s job creation. Moving forward, a sustained period of elevated employment growth is unlikely. While there are 3.9 million fewer jobs than in February 2020, about 2.4 million people have left the labor force, resulting in a low unemployment rate of 4.2 percent. Since 2000, fewer than four years have been spent with tighter joblessness. The potential to unlock more labor power after the pandemic remains, however. About 1.2 million people were unable to look for work last month due to the pandemic.

November hiring highlights strengths of current economy. The transportation, warehousing, construction and manufacturing sectors created a combined 112,000 jobs in November. Growth in these fields reflects, among other factors, the ongoing demand for more residential and industrial space to support an expanding population that is relying more heavily on delivery. Added manufacturing positions correlates with greater U.S. factory output to suggest that supply chain disruptions are no longer worsening. Many retailers are nevertheless enlarging inventories to avoid future shortages, increasing the demand for warehouse space.

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* Sources: Marcus & Millichap Research Services; Bureau of Labor Statistic