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US restaurants, retailers lose over 50,000 jobs in November as growth cools

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US restaurants, retailers lose over 50,000 jobs in November as growth cools

Restaurants and retailers shed jobs in November as U.S. employment recovery slowed during the month amid rising COVID-19 cases and new coronavirus restrictions. The two industries hit hard by the pandemic will likely endure more losses in the coming months, experts said.

The U.S. economy added 245,000 jobs in November, less than the revised 610,000 jobs added in October, data from the Bureau of Labor Statistics shows. The jobs report was expected to show an increase of 500,000 jobs, according to a consensus estimate of economists polled by Econoday.

Among consumer-focused industries, retail trade shed 34,700 jobs in November, down 0.23% on a month-over-month basis. Employment in the sector is still 550,000 jobs below its February level.

The decline in retail jobs likely represents a shift toward online shopping during the holiday season, Stephen Stanley, chief economist at Amherst Pierpont Securities, said in a note. Kathy Bostjancic, head of U.S. macro investor services at Oxford Economics, said in a research note that the sector lost jobs as the typical temporary holiday hiring at brick-and-mortar stores did not happen due to the ongoing coronavirus crisis.

Food services and drinking places, a sector within leisure and hospitality, lost 17,400 jobs during the month.

"Given the intensity of the COVID 19 surge across the United States, it isn't surprising that retail and food services and drinking places shed jobs. Restrictions have been imposed at local levels and will continue as long as the coronavirus threat remains," Quincy Krosby, chief market strategist at Prudential Financial, said via email.

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Experts expect challenging days ahead for the restaurant and retail sectors but believe things could get better once the virus abates.

"This is quite worrisome for these sectors as a worsening health crisis and fast-approaching winter will curtail retail and leisure activity," Gregory Daco, chief U.S. economist at Oxford Economics, told S&P Global Market Intelligence via email.

Stephen of Amherst Pierpont Securities said that while things will likely get worse by mid-December, these sectors should be able to "bounce back quickly" after the virus recedes.

The leisure and hospitality industry, overall, added 31,000 jobs in November, up 0.23% from October. But employment in the sector is down by 3.4 million jobs since February.

The number of unemployed people who were on temporary layoffs fell by 441,000 to 2.8 million in November, while the number of people who lost jobs permanently remained virtually unchanged at 3.7 million, according to the Bureau of Labor Statistics.

"Going forward, with federal assistance and forbearance opportunities set to expire at year-end, coupled with increasingly onerous restrictions and lockdown measures as a result of a rapidly rising number of COVID-19 cases, further job losses and business closures are expected, painting an increasingly difficult scenario for households and workers," Lindsey Piegza, chief economist at Stifel, said in a note.

A separate Dec. 3 report showed the number of Americans filing for unemployment benefits declined to 712,000 in the week ended Nov. 28 from the previous week's revised reading of 787,000.

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