Job growth was weaker than expected in November, but the unemployment rate still declined four tenths of a percent to 4.2%. We believe a variety of factors are keeping some workers out of the labor force, which has likely held back job growth despite strong demand from employers. These dynamics may remain in place over the near-term, though we tend to believe labor supply will improve as the health situation improves. U.S. nonfarm payrolls increased by 210,000 in November, versus the consensus forecast of 550,000. On a trailing 3-month and 6-month basis, payrolls increased an average of 378,000 and 612,000 per month, as job growth has decelerated from the summer months. The labor participation rate improved to 61.8% in November from 61.6% in October but remains lower than the pre-pandemic level of 63.4%. The employment-population ratio increased to 59.2% from 58.8%, but also remains below the pre-pandemic level of 61.1%. The U-6 underemployment rate, which includes those who are marginally attached to the labor force and employed part time for economic reasons, declined to 7.8% in November from 8.3% in October (versus 7.0% in February 2020). Annualized average hourly earnings were up by 4.8% in November (unchanged from October), reflecting strong wage growth driven in part by the ongoing imbalance in the supply and demand for labor. Although nearly 6.9 million people remain unemployed in the U.S., the labor market has made significant progress over the past year. We believe uncertainty related to the new Covid-19 omicron variant may prolong some workers’ return to the labor force, and supply and demand for workers in high-touch service sectors in particular may remain unbalanced over the near- to intermediate-term, keeping upward pressure on wages.