The disappointing November jobs report has reinvigorated the push for end-of-year stimulus
- November's nonfarm payrolls report handily missed expectations, but the gloomy data has amplified calls for a near-term stimulus deal.
- Democratic and Republican lawmakers are increasingly backing a $908 billion relief measure that provides new funds for the Paycheck Protection Program and expanded federal unemployment benefits, and fresh aid for state and local governments.
- The labor market's weakening recovery "shows the need for strong, urgent emergency relief is more important than ever," Senate Minority Leader Chuck Schumer said.
- Investors pushed US stocks to record highs on hopes the disappointing data would expedite stimulus negotiations.
November's nonfarm payrolls report fell well below economist expectations. Many see it as the tipping point for stimulus talks.
The Bureau of Labor Statistics said Friday that the US added 245,000 jobs last month, down from the revised 610,000 additions in October. Economists surveyed by Bloomberg expected 460,000 new payrolls. The unemployment rate fell to 6.7% from 6.9%, meeting estimates but marking the smallest improvement since the pandemic began.
Though the report shows a seventh straight month of job gains, it will take roughly four years to reach pre-pandemic employment if hiring continues at its November pace. The disappointing data prompted economists and lawmakers to amplify their calls for new stimulus, noting that a lack of fiscal support endangers the already weakened recovery.
The report "shows the need for strong, urgent emergency relief is more important than ever," Senate Minority Leader Chuck Schumer said. "Senate Republicans are increasingly understanding this urgency, and [Senate Majority Leader Mitch McConnell] should hear their pleas as well as those of the millions of struggling American families."
The report "shows the economy is stalling" and doesn't account for the continued rise in COVID-19 cases seen this month, President-elect Biden said. "This situation requires urgent action," he said in a statement. "Congress and President Trump must get a deal done for the American people."
During her weekly press conference, Speaker Nancy Pelosi brought up the disappointing jobs report as well, saying it "further necessitates our taking action to crush the virus, to open up the economy and to open up our schools." She added there was "momentum" behind the latest relief talks.
Congress this week has made its biggest steps toward a deal in months. Congressional Democratic leaders and President-elect Joe Biden embraced a $908 billion stimulus proposal on Tuesday, lowering their multitrillion-dollar price tag in hopes of flooding the economy with more federal dollars.
The framework includes funds for expanded federal unemployment benefits, the Paycheck Protection Program, and state and local government aid. It omits a second round of $1,200 direct payments for Americans.
Senate Republicans warmed to the measure on Thursday, with senior lawmakers including Lindsay Graham and Chuck Grassley backing the package.
McConnell has yet to publicly endorse the deal and circulated a far smaller proposal of his own this week. But with momentum shifting toward the larger of the two packages, the $908 billion plan represents the closest Congress has been to approving sweeping stimulus since the CARES Act was passed in March.
Investors also viewed the November jobs data as a driver for fast-paced aid negotiations. Stocks rose to record highs on Friday as strengthened stimulus hopes offset the gloomy labor-market report.
"The general bet in the equity market is that COVID-19 and the economy are going to get worse and this will force Congress to the table to make a stimulus deal," David Donabedian, chief investment officer at CIBC Private Wealth Management, said.