Declining Unemployment Rates Suggest Economic Recovery Despite Lingering Labor Shortage

The national unemployment rate dropped four basis points to 4.2% for the month of November with the creation of around 210,000 new jobs, MPA reports. While declining unemployment rates suggest economic recovery post-pandemic, a persistent shortage of workers leaves the construction industry largely short-handed as it combats a nationwide housing shortage.

Though many more trade workers are needed to boost inventory and cut down housing demand, a higher labor participation rate and increased wages mean that the national economy is inching closer to full employment.

Around 210,000 new jobs were created in November – smaller than expected, but still a sign that the economy has been recovering, according to MBA chief economist Mike Fratantoni.

More workers are getting off the sidelines as employers boost wages. The labor-force participation rate edged up from 61.6% in October to 61.8% in November as average wages rose 4.8% from November 2020.

Fratantoni stated that the rise in wages and increase in the labor force, coupled with the still-elevated number of job openings, suggest that the economy is getting closer to full employment.

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