U.S. Added 245,000 Jobs Last Month as Hiring Slowed The unemployment rate ticked down to 6.7%, signaling a sharp slowdown in the labor-market recovery.

(…) The labor market has now regained 12 million of the 22 million jobs lost at the onset of the pandemic. At November’s pace of job growth, employment wouldn’t return to pre-pandemic levels until 2024, Glassdoor senior economist Daniel Zhao said. (…)

The labor-force participation rate, or the share of Americans working or looking for work, was 61.5% in November. That is up from April’s trough, but remains near the lowest level since the 1970s.

The number of individuals out of the labor force who want a job increased in November to 7.1 million, Friday’s Labor Department report said. (…)

But the number of the long-term unemployed—those without work for 27 weeks or more—rose by 385,000 to 3.9 million in November, accounting for 36.9% of the total counted as jobless. (…)

The chart below shows that there are still 9.9 million (6.5%) fewer people working than last February. More than 4.7 million people were categorized as “not on temporary layoff”, their job having been permanently eliminated. It also shows that 4 million people (2.4%) have left the labor force.

The Payrolls Index (employment x hours x wages, which was rising 4.7% YoY last February, is -0.7% YoY in November (-2.1% real). Americans are not reducing their high savings, merely diverting services spending toward goods.

Covid Shrinks the Labor Market, Pushing Out Women and Baby Boomers Nearly four million Americans have stopped working or looking for jobs, a 2.2% contraction of the U.S. work force. A smaller labor market leaves fewer workers to build machines and clean tables, restraining the economy’s long-term prospects.

(…) Just a third of the increase in the number of people sidelined from the labor force since February 2020 say they still want a job but are not now looking, according to the Labor Department.

Older workers who leave the labor force for good might mean employers turn to hiring more younger workers at lower wages when the economy recovers more broadly. But that’s not the same thing as the creation of new jobs, which is the engine of economic growth.

(…) some economists see three reasons the pandemic’s depressing effect on the labor force could linger. First, it appears to have sped up some baby boomers’ decision to retire, shrinking the number of productive workers in the economy prematurely. Second, it is forcing some parents of young children, in particular women, to reduce their hours or stop working altogether, which could make a comeback harder. Third, it is falling particularly heavily on workers with less education and skills. These workers often struggle to find well-paying work and many drop out of the workforce. (…)

In the third quarter of this year, about 3.2 million more baby boomers said they were out of the labor force due to retirement than in the same period a year earlier, according to Pew Research. From 2011 through 2019, the number of retired baby boomers rose at a rate of about two million annually.

Labor-force participation among workers aged 55 and over logged in at 38.7% in October, down from 40.3% in February. (…)

The number of workers who said their layoff was permanent, rather than temporary, rose to 3.7 million in October from 1.3 million in February. Such permanent job losers are more likely to drop out of the labor force than those on temporary layoff, wrote Stephanie Aaronson and Wendy Edelberg, economists at the Brookings Institution, in a recent analysis. Once out of the labor force, it can take a long time for such a worker to return even as the economy improves. A labor-force dropout is someone who is both out of a job and not looking for one.

(…) some jobs will permanently disappear, as new consumer habits stick and as the coronavirus accelerates the shift toward automation, virtual interactions, and e-commerce, said David Autor, economist at the Massachusetts Institute of Technology. (…)

Employment Picture Darkening, Even More than Jobs Figures Suggest Situation has already gotten worse since the November jobs report was compiled

(…) This chill is showing up in higher-frequency data: Restaurant reservation figures from OpenTable show a marked decline since early November, for example, while figures from scheduling-software company Homebase show that the number of hourly employees working at restaurants, retailers and other small businesses is slipping. (…)

Payrolls Take a Covid Break Job growth slowed but much of the recovery remains strong (The WSJ Editorial Board)

(…) Yet the jobs report was hardly a disaster, as payrolls expanded in the month by a net 245,000 new jobs and the jobless rate fell to 6.7%. The private economy did even better with 344,000 new jobs, offset by a decline in government payrolls—mainly due to the end of 93,000 temporary census jobs. State and local governments lost a net of 13,000, nearly all of that related to local school closures.

Much of the economy is still recovering well from the pandemic recession, as manufacturing and construction both added 27,000 jobs in the month. Transportation and warehousing had a gangbusters month with 145,000 new hires, as Amazon continues to hire as many as 1,400 workers a day. Walmart has added tens of thousands of new U.S. workers since March, as its online sales have soared, and this week it announced more than $700 million in new cash bonuses for employees. The retailer has paid $2.8 billion in employee bonuses this year. (…)

The worst news is that the civilian labor force fell by some 400,000, which may suggest some longer-term structural damage as workers who lose jobs in pandemic-hit industries lack the skills to be hired in housing construction or growing parts of the economy. (…)

The Covid surge will mean a subdued holiday season. But as long as governments avoid shutdowns like those now starting in California again, the economy should keep growing. (…)

Small Businesses Face Uncertain Future As many as 4 million small businesses could be lost in 2020, analysts say, as the pandemic takes its toll on local economies.

Watch the two NY curves on the far right adding to the top chart:

Data: Our World in Data (Oxford). Chart: Naema Ahmed/Axios

President Trump last night. Photo: Andrew Caballero-Reynolds/AFP via Getty Images and Axios

Federal Student-Loan Borrowers Get Another Month’s Reprieve Millions of borrowers won’t have to start repaying their student loans until February.

The National Association for Business Economics released its latest outlook showing 73% of panelists believe that the economy will have returned to pre-pandemic GDP levels by the second half of 2021.

• That’s a notable improvement from August when more than 60% of the group’s economists predicted U.S. GDP would remain below its 2019 level until at least 2022, with nearly 50% expecting the rebound wouldn’t happen until the second quarter.

• Just 18% now expect it will take until the first half of 2022 for the economy to reach its 2019 size. (Axios)

Canada’s job market ploughs ahead, but December set for ‘significant decline’

Employment rose by 62,100 jobs in November and the unemployment rate declined to 8.5 per cent from October’s 8.9 per cent, Statistics Canada said Friday. The gain was driven by full-time work, which rose by nearly 100,000 positions. All told, the labour market has recovered about 80 per cent of the three million jobs that were lost in March and April at the start of the pandemic.

While November’s gain was the weakest since the recovery began in May, it was also better than anticipated. The median estimate from economists was a gain of 20,000 positions, with many calling for a decline owing to tighter COVID-19 restrictions across Canada.

That said, a setback may be simply postponed. Statscan’s report, which pertained to work conditions from Nov. 8 to 14, did not account for the latest public-health measures in many regions, including much tighter controls in Toronto. (…)

China Exports Generate Record Trade Surplus China’s trade surplus widened to a record in November, as global demand for the country’s goods grew even more robust, with exports up 21% from a year earlier.

November exports were up 21% from a year earlier, the General Administration of Customs reported Monday, accelerating from October’s 11.4% and beating economists’ 12% forecast. Imports were up 4.5%, slowing slightly from October’s 4.7% and short of the 5.3% expected by economists. The resulting $75.42 billion trade surplus topped the record set in May, when a drop in imports was the major factor. (…)

China’s November shipments to the Association of Southeast Asian Nations and the U.S., its No. 1 and No. 3 trading partners, respectively, were up 10% and 46% from a year earlier, beating October’s pace. Exports to the European Union, its No. 2 trading partner, were up 8.6% after being down 7% in October, according to calculations made by The Wall Street Journal. (…)

China’s November imports of goods from the U.S. were up 33% from a year earlier, on par with October’s pace. But purchases of American farm, energy, and other products and services are far below levels promised in the trade deal with the U.S. earlier this year. Through October, Chinese imports of goods covered in the agreement were 55% of the year-to-date targets, according to a calculation based on Chinese figures by Chad Bown, a senior fellow at Peterson Institute for International Economics. (…)

ING:

Shipments squeezed in before the Thanksgiving and Christmas holidays generated a jump in exports from China. We don’t expect this to be a trend because the low import growth of just 4.5% YoY means that many exports in coming months should have been fulfilled in November’s shipments. Another factor behind the small import growth is that China imported quite little from Australia, this will likely continue as this is more of a political issue than related to the economic cycle.

JPMorgan Warns of Crowded Trades Amid Markets’ ‘Clear Consensus’

The last time such a strong agreement on strategy existed was in late 2017 and early 2018, and that time period serves as a reminder that such a consensus view rarely plays out in its entirety, strategists led by Nikolaos Panigirtzoglou wrote in a note Friday. Global stocks reached records in January 2018 amid massive inflows, but extended positioning in risk assets became a concern and the next month the “Volmageddon” volatility spike crushed trades that many investors had viewed as a sure thing. (…)

For JPMorgan, those crowded trades include: short the U.S. dollar versus cyclical developed-market currencies, long copper and long Bitcoin. On the other hand, bullish positions on oil and gold are less crowded, as are overweight emerging-market equities relative to developed ones, according to the report.

Still, medium-term equity positioning appears to be average rather than overbought, the strategists said.

“Any equity correction in the near term would represent a buying opportunity,” they said. “We are only in the middle of the current bull market.”

Insiders seem to be crowding the bearish side:

Airbnb Boosts IPO Range, Valuing Itself at Up to $42 Billion The home-rental company plans to boost the proposed price range of its initial public offering to between $56 and $60 a share, from $44 to $50, the latest sign that the red-hot IPO market is ending the year on a high note.

(…) DoorDash Inc., the food-delivery company that is expected to debut Wednesday, the day before Airbnb, plans to price its shares at the high end of or above its range of $90 to $95 a share—already raised from between $75 and $85, people familiar with the offering said. That would give the San Francisco company, the largest among its peers, a valuation of as much as $36 billion or more, on a fully diluted basis and including proceeds from the offering. (…)

So far this year, more than $140 billion has been raised in initial public offerings on U.S. exchanges, far exceeding the previous full-year record high set at the height of the dot-com boom in 1999, according to Dealogic data that dates back to 1995. (…)

December is typically a quiet time in the IPO market. This year there will instead be a flurry of offerings. In addition to Airbnb and DoorDash, videogame company Roblox Corp. and the parent of online retailer Wish, ContextLogic Inc., are expected to debut before the year is through. (…)

I Started Trading Hot Stocks on Robinhood. Then I Couldn’t Stop. Spinning prices, scratch-off rewards and flying confetti? Even the most skeptical investor can be drawn in.

My editor and I decided that I should see what the fuss is all about. I started trading on Robinhood on Oct. 27, expensing my $100 investment. Any profits I made would go to charity; any losses would go toward public humiliation. I closed all my positions on Nov. 17. (…)

I created a crude stock screener on FinViz.com, a popular market-data site, that any do-it-yourself speculator could replicate. I would mechanically buy any stock that was up at least 30% over the past week, moved at least 50% more sharply than the market and had volatility greater than 15%. As soon as it dropped off that list, I would sell.

I never did any research; the companies would be just ticker symbols to me. Such insanely risky, wildly fluctuating stocks would either make—or lose—a ton of money. That was the plan. (…)

Whenever a stock’s price changes, Robinhood updates it not just by showing an uptick in green and a downtick in red, but also by spinning the digits up and down like a slot machine. This flux of direction and color quickly becomes hypnotic. (…)

Even so, with a few moments of exposure, the ever-changing numbers and colors put me into a kind of trance. Robinhood showed me a list of “Top Movers.” They were bright lime green. They were beautiful. I had no idea what most of them were. My plan flew out the window and I bought a fistful of Top Movers instead: SRRK, EXAS, HOG, RDIB and EXPI. (…)

In the end, after three hectic weeks, I finished with $95.01. I’d lost 5% of what I’d put in. Counting the free stock I’d gotten, I was down 10.2%.

Over the same period, the S&P 500 went up 7%. (…)

Trump-Era Tax Rule Benefiting Some Multinationals May Get Revised Under Biden New administration may seek to revise or repeal rule that limits reach of the U.S. minimum tax on foreign profits

The rule, which gives some corporations a path out of a U.S. minimum tax on foreign earnings, has drawn criticism from progressives, including Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee. (…)

If Democrats don’t take control of the Senate after Georgia’s runoff elections in January, regulatory changes present the clearest paths to one of President-elect Joe Biden’s campaign promises: higher taxes on U.S. companies’ foreign operations. (…)

In recent securities filings, more than 30 companies disclosed more than $300 million in benefits from the regulation, including the retroactive feature. Philip Morris, the global tobacco company, recorded a $93 million benefit, while bubble-wrap maker Sealed Air recorded $16 million for 2018 and 2019. Other beneficiaries include manufacturer Leggett & Platt Inc., chemical company W.R. Grace & Co. and Laureate Education Inc. (…)

The regulation tends not to help technology and pharmaceutical companies that pay very low foreign tax rates and still face GILTI. And it tends not to help the largest U.S.-based multinationals with operations in high-tax and low-tax countries. But companies with losses or certain state-tax obligations can find some advantages from the Treasury rule. (…)