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November Jobs Report Disappoints Amid Record COVID Surge; Unemployment Rate Falls to 6.7%

More workers left the job market last month, while only 245,000 new positions were created amid a record rise in November COVID infections, the Bureau of Labor Statistics reported showed Friday.

The U.S. economy added fewer-than-expected new jobs last month as private-sector and retail hiring slowed in the run-up to the key holiday shopping period and a record 4 million monthly surge in coronavirus infections.

The Bureau of Labor Statistics' November non-farm payroll report showed net new 245,000 jobs were created last month, down from the 610,000 gained last month and well shy of the Street consensus of 469,000. Average hourly earnings rose 0.3% from October to $29.49 each, taking the year-on-year gain to 4.4%.

The headline jobless rate, the BLS said, slipped to 6.7% while the broader labor force participation rate fell 2 basis point to 61.5% as more workers -- especially women and the elderly -- left the job search market completely.

"Friday's report confirms that the recent labor market recovery is decelerating. With escalating COVID-19 cases and enforced shutdowns here to stay through the winter, business executives see the writing on the wall and have fallen back on layoffs to cut costs," said Hercules Investments CEO James McDonald.

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"For now, the job market recovery is over until the winter wave of COVID-19 is behind us," he added. "Vaccine deployment will not happen in time to prevent layoffs both from small businesses and major multinational companies." 

The figures are disappointing in that they suggest that the November surge in coronavirus infections, which are now rising at a daily pace of 200,000, and lockdown orders and stay-at-home guidelines from major states such as New York and California are not only hitting current hiring plans, but could trigger further job market weakness over the final month of the year.

U.S. equity futures held onto modest earlier gains immediately following the jobs data release, with contracts tied to the Dow Jones Industrial Average indicating a 90 point opening bell gain, while those linked to the S&P 500 are now suggesting an 8.5 point move to the upside.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was little-changed at its two-and-a-half year trough of 90.646. Benchmark 10-year Treasury note yields, meanwhile, traded 1 basis point higher at 0.9228%.