The U.S. economy added 210,000 jobs in November which was a considerable miss given consensus expectations of more than 500,000 jobs added. It was an unwelcome surprise, especially following the big gains from last month.

Further, most of the month featured a dramatic decline in coronavirus cases, and this trend has reversed in the last couple of weeks, so it's fair to expect more weakness in hiring in December and January especially with the emergence of the omicron variant.

This also marked the weakest jobs report since December 2020 when the economy experienced a mild contraction. However, while the headline number is certainly disappointing, there are some caveats. For one, the jobs number is notoriously difficult. After all, there are more than 148 million jobs in the U.S. which means that measuring the incremental number of jobs added is not an easy task. Thus, there's a lot of noise, and the underlying trend is more important.

Currently, the economy has added more than 6 million jobs in 2021. At this pace, it should reach full employment by the end of next year. The unemployment rate hit a new post-pandemic low of 4.2%. The labor force participation rate is also starting to show improvement, reaching 61.8% the highest level since March 2020. There's also been a trend of positive revisions to previous months as more data comes in which is also entirely possible for November as well.

Looking at the report by different components shows the strongest hiring in manufacturing, construction, warehouses, transportation, and professional and business services. Surprisingly, the retail sector seems to have lost jobs which is unusual given we are entering the holiday season, and there's usually an increase in hiring seasonal workers.

It could reflect a change in strategy among retailers, workers having more options especially with many warehouse positions paying above $20 per hour, or simply a reflection of a tight labor market. Others contend that retailers are focusing on adding permanent workers rather than seasonal ones, so they are hiring slowly.

Overall, the economy is still down 3.9 million jobs from its pre-pandemic levels. Average hourly wages also continue to rise by about 0.3% in November and are about 4.8% higher than last year.