Despite missing estimates on job gains by a wide margin, the latest jobs report from the Labor Department shows an economy trudging along toward its pre-pandemic state.
The economy added 210,000 jobs in November against estimates of more than half a million, according to the latest data from the U.S. Bureau of Labor Statistics.
On average this year, the economy has added 555,000 jobs each month, marking November as a significant drop-off in the trend of the recovery.
On the positive side, unemployment dropped 0.4 percent to 4.2 percent, while the number of unemployed persons fell by 542,000 to 6.9 million.
"Both measures are down considerably from their highs at the end of the February-April 2020 recession," the report stated. "However, they remain above their levels prior to the coronavirus (COVID-19) pandemic (3.5 percent and 5.7 million, respectively, in February 2020)."
Some economists have pointed out that the tension between the drop in job gains and lower unemployment could be explained by the nature of the two surveys that inform the report.
For comparison, payroll processing firm ADP reported earlier this week that private hiring had increased by 534,000 in November — much closer to the expected number.
Labor force participation, meanwhile, which has remained steady in recent months, edged up to 61.8 percent. This is the highest rate since February 2020, but still 1.5 percent below that high.
With its signs of a tight labor market, the report could put additional pressure on the Federal Reserve to rein in inflation with a faster timeline for tapering and eventually an interest rate hike.
However, the report does show that employment gains are widening, benefitting the most disadvantaged groups in the economy.
Black unemployment dropped from 7.9 percent in October to 6.7 percent in November, while Hispanic unemployment rate dropped from 5.9 percent to 5.2 percent.
This tracks with Fed Chair Jerome Powell's goal to make job growth more inclusive.
"Wages had been moving up, and meaningfully so, especially on the lower ends of the pay scale," said Powell at a recent conference focused on diversity and inclusion. "Many who had struggled for years were finding jobs. Racial disparities in unemployment were narrowing."