A Good, But Not Great, Jobs Report For November
The November Jobs Report was good, but there still aren't signs of the kind of stronger economic growth we need to see.
The November Jobs Report followed up the report that was released last month for October with another showing of a relatively strong jobs market, and a seeming guarantee that the Federal Reserve will raise rates later this month:
Total nonfarm payroll employment increased by 211,000 in November, and the unemployment rate was unchanged at 5.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in construction, professional and technical services, and health care. Mining and information lost jobs.
In November, the unemployment rate held at 5.0 percent, and the number of unemployed persons, at 7.9 million, was essentially unchanged. Over the past 12 months, the unemployment rate and the number of unemployed persons are down by 0.8 percentage point and 1.1 million, respectively. (See table A-1.)
(…)
Total nonfarm payroll employment rose by 211,000 in November, about in line with the average monthly gain of 237,000 over the prior 12 months. In November, job growth occurred in construction, professional and technical services, and health care. Employment in mining and information declined over the month. (See table B-1.)
Employment in construction rose by 46,000 in November, with much of the increase occurring in residential specialty trade contractors (+26,000). Over the past year, construction employment has grown by 259,000.
In November, professional and technical services added 28,000 jobs. Job gains occurred in accounting and bookkeeping services (+11,000), and employment in computer systems design and related services continued to trend up (+5,000). Over the year, professional and technical services has added 298,000 jobs.
Health care employment increased by 24,000 over the month, following a large gain in October (+51,000). In November, hospitals added 13,000 jobs. Health care employment has grown by 470,000 over the year.
Employment in food services and drinking places continued to trend up in November (+32,000) and has risen by 374,000 over the year.
Retail trade employment continued to trend up in November (+31,000) and has increased by 284,000 over the year. In November, job gains occurred in general merchandise stores (+12,000) and motor vehicle and parts dealers (+9,000). Over the past 12 months, these industries have added 85,000 jobs and 71,000 jobs, respectively.
Employment in mining continued to decline in November (-11,000), with losses concentrated in support activities for mining (-7,000). Since a recent peak in December 2014, employment in mining has declined by 123,000.
Information lost 12,000 jobs over the month. Within the industry, employment in motion pictures and sound recording decreased by 13,000 in November but has shown little net change over the year.
Employment in other major industries, including manufacturing, wholesale trade, transportation and warehousing, financial activities, and government, changed little over the month.
Looking at other statistics measured by the report, the average workweek ticked downward slightly, but average hourly wages ticked slightly upward. This is consistent with the general trend for the past year or so which has seen both measures stay within relatively narrow boundaries that seem to indicate that employers may bee looking more at hiring new employees than increasing the hours worked by existing employees. Long term unemployment and the broader U-6 measure of unemployment continue to drop while Labor Force Participation remains at 62.5%, still near historical lows but perhaps indicative of a ‘new normal’ as the economy absorbs the impact of the slowly retiring Baby Boom Generation, suggesting that much of the slack from the Great Recession is being picked up to some degree. Finally, the jobs numbers for October and November were revised upward by a total of 35,000 new jobs, meaning that the economy has created an average of 218,000 over the past three months.
As The New York Times notes, these numbers, while hardly indicative of a boom, are strong enough that it likely guarantees that the Federal Reserve will raise interest rates later this months:
The American economy created 211,000 jobs in November, the government reported Friday, a robust showing that all but guarantees policy makers at the Federal Reserve will raise interest rates for the first time in nearly a decade when they meet this month.
The unemployment rate held steady at 5 percent, unchanged from October.
The big gain in hiring reported for October was revised upward by 18,000, while September’s weaker payroll performance was revised upward by 8,000.
The overall picture of labor market strength evident in the November report removes the last major obstacle ahead of the Fed decision.
“Short of geopolitical events that are larger than anything we’ve seen lately, this is a done deal,” said Diane Swonk, chief economist at Mesirow Financial in Chicago.
Before the report for November, economists had been looking for payrolls to rise by 200,000, with no change in the unemployment rate.
This week, the chairwoman of the Federal Reserve, Janet L. Yellen, and other top Fed officials hinted that a rate increase was imminent.
Raising rates, Ms. Yellen said in a speech Wednesday, would be “a testament, also, to how far our economy has come in recovering from the effects of the financial crisis and the Great Recession.”
“It is a day that I expect we all are looking forward to,” she added.
Besides the tempo of hiring and the unemployment rate, Ms. Yellen and fellow Fed policy makers have been paying close attention to the pace of wage increases, or until very recently, the lack thereof.
At the same time, the Times’ Neil Irwin notes that while this report and other statistics do constitute good news, there’s still not a sign of growth out there:
The thing about the new jobs numbers is that, solid though they may be, they are solid in exactly the same way that most jobs numbers have been solid for the last couple of years. They don’t show the kind of progress on some key weaknesses in the economy that the Fed might like to see if it’s going to move faster, rather than slower, in the path of rate rises.
Consider one of the great weaknesses of the economy the last few years: the millions of people who left the labor force entirely during the last recession and have not returned, many of them of prime working age. The new numbers don’t offer much sense of progress. The percentage of the population working was unchanged at 59.3, which is only a tenth of a percentage point higher than it was a year earlier.
And average hourly earnings rose 0.2 percent, which was what forecasters expected but also doesn’t suggest that wage inflation is starting to break out. That number is up 2.3 percent over the last year, which is hardly the stuff that would fuel fears of excessive inflation.
The economy has withstood the threat that China and other emerging markets would drag down the global economy, a fear that enveloped financial markets over the summer. The unemployment rate is low. At the Fed, those arguing that it’s time to wean the economy from its reliance on zero rates are likely to win the day.
But in terms of the day-to-day experience of American workers and potential workers, the new numbers point to how much repair there is left to take place.
That day-to-day experience, and the feeling that the seems to be prevalent on many levels of American society that the economy really isn’t as good as the statistics are claim is likely to be a big issue in the 2016 elections. Already, we have seen signs of it in the success that Vermont Senator Bernie Sanders has had in attracting crowds, and poll support, since launching his campaign at the start of the summer. We’ve also seen in the rhetoric of Hillary Clinton, who began to adopt the emphasis, if not the exact theme and proposals, of the Sanders campaign when her poll numbers began to slip over the summer. On the other side of the aisle, you hear similar arguments from Republicans who argue that in favor of policies that they say are aimed at increasing economic growth and employment and expanding economic opportunity for all Americans. Whatever one might think of the merits of the policy proposals that each of these candidates are making, it’s obvious that the candidates themselves are responding to the concerns of voters and the perception that the economic situation of the average American has not improved since the Great Recession as much as the numbers, and the gains on Wall Street, would make it seem. You can see this reflected in the bellwether Right Track/Wrong Track poll, which continues to show that Americans believe that the country is on the wrong track. Since elections are often largely driven by how voters feel about the state of the economy and the country, these perceptions could well end up deciding the election in the end regardless of what the economic statistics say.
So, yes, this is a good jobs report and we’ll hopefully see more numbers like this going forward. As Irwin says about, though, to some extent this is just a ‘marking time’ report that, while it sows the economy slowly moving forward doesn’t show much sign of the kind of growth we really want to see. If that continues, it could have some interesting political implications.
We’ve experienced steady economic growth since the near catastrophic Great Recession of 2008. The irony to me is that, had we embarked upon a course of austerity based economic policies – balanced budgets, no debt-financed stimulus – we might very well be experiencing zero growth and unemployment rates closer to 10%.
Between outsourcing and factory automation we will never see private sector job growth at the level we have seen in the past. We need to be updating our collapsing infrastructure which will produce real jobs.
@Ron Beasley: Agree Ron. Not sure what constitutes “good” to people anymore. Particularly for Doug. One I like to check in the FRED data is new housing starts, if you look at that historically as compared to now it is a good bell weather – although it has improved from the 08 collapse, it is no where near historical norms…housing would help, but if it is down why not more infrastructure? But yeah, the times are a changin’
The change in total nonfarm payroll employment for September was revised from
+137,000 to +145,000, and the change from October was revised from +271,000 to
+298,000. With these revisions, employment gains in September and October combined
were 35,000 more than previously reported. Over the past 3 months, job gains have
averaged 218,000 per month.
We, almost alone among developed nations, are adding jobs. And have done so for six years. Under Mr. Obama. That’s not, “Meh,” that’s “Wow.”
No news is good news for Doug it seems.
@Jc: The I5 bridge between Oregon and Washington is very old and could not survive a major earthquake. Much of the water distribution system in Portland is over 100 years old and leaks more water than it distributes. The multiple bridges that cross the Willamette river connecting the east side of Portland to the west side are very old and need to be replaced.
High speed rail between Portland and Seattle makes sense to someone like me who used to make that trip on business a couple of time a month. The trip on I5 was ungodly and the Seatac airport is miles from where you want to go. I’m not to big on improvements to the electrical grid because I think future power sources will be smaller and more localized..
I guess this is the closest we will ever come to Doug praising Obama for doing a good job of steering the economy out of the worst economic crisis since the 1930s.
I wonder where that perception came from? It’s a mystery wrapped up in a conundrum wrapped up in an enigma.I guess Doug can’t figure it out, but I have some ideas. It was “morning in America” in 1984 when employment dipped to 7.5 per cent. Right now, the 5 per cent unemployment rate is lower than it was than at any time during Saint Ronaldus Maximus’ Presidency, but the best we can get is tepid praise from the so called liberal MSM, and of course continuing predictions of disaster from the Foxverse.
Oh well, someone in the Obama Administration needs to take a course in Messaging 101. Had this recovery happened under a Republican President, they would already be naming airports after him.
http://www.zerohedge.com/news/2015-12-04/january-us-has-added-294000-waiters-bartenders-and-zero-manufacturing-workers
Nice “steering.”
http://www.zerohedge.com/news/2015-12-04/where-job-gains-were-319000-part-time-jobs-economic-reasons-added
See spot steer. Steer, spot, steer.
@Ron Beasley:
Given most of the Geological reports on the Cascadia fault line, I suspect when the next big earthquake hits the pacific NW, a revamped I-5 would just connect two partially underwater piles of rubble..
A shame we didn’t elect Romney. He promised 6% unemployment by the end of next year. And I have every confidence that if we somehow swapped him for Obama right now that Romney’s policies would get us to 6% by next Jan, probably way more.
The chances of having a “great” job report are about nil. The Fed could dump another three trillion or more into the economy and it wouldn’t matter.
Dodd-Frank. SarbOx. Obamacare. Equal Pay Act. The NRLB for the past six-plus years. All have been and continue to be severe job killers. Policies and laws matter. Just ask the future baristas and waiters of America, i.e., recent college and university grads.
@Bill Lefrak:
Bullshit. Provide a link from somewhere with credibility, please.
@C. Clavin:
You’re trying to get an engagement from Tsar Nicky? Almost never will happen. He usually posts an approximately 5 paragraph word salad filled with invective against–well pretty much everyone–offering no original thoughts or substance, that he probably took hours to craft. Now here you come asking for actual evidence and facts. It’s going to take him hours just to process the words in your question, then even longer to carefully craft a substance-free response.
It’s why he usually posts one, and only one, comment per topic. It takes too much thinky time to do more.
When dealing with the insane, racists, the ideologically blind, haters, and others of a rancorous nature, there’s only so much that messaging can do…
http://www.advisorperspectives.com/dshort/updates/Demographic-Trends-in-Employment-Participation.php
This set of data and graphics is quite revealing. I wonder how many can interpret it correctly as opposed to politically.
The math here is really f’ing simple, kids.
Reagan added 1,400,000 public sector jobs.
Bush 41 added 1,100,000 public sector jobs – in one term.
Bush 43 added 1,700,000 public sector jobs (and zero private sector jobs).
So Republicans on average grow Government by an average of 1.4 million jobs.
Under Obama there have been well over 600,000 public sector jobs eliminated.
So conservatively speaking…the economy is missing 2 million net jobs.
Plug 2 million jobs into today’s economic news and tell me what that does.
If the recovery is slow it’s because Republicans want it to be, So why are they always complaining about getting exactly what they want? Because they want it to be even worse?
@C. Clavin:
Check out this chart…updated thru the October 2015 jobs report.
http://stateofworkingamerica.org/charts/total-job-change-for-public-sector-workers-since-the-start-of-each-of-the-last-four-recoveries/
That’s all you need to know about this.
Luring back the people who dropped out of the labor force might be easier said than done. I would reasonably assume that most of them have found ways to cope with the lack of regular income, be it disability benefits, sponging off relatives, or doing odd jobs off the books.
@Guarneri:
The share of jobs that were part time increased during the recession, but has been decreasing since then. The reduction in employment participation rate is mostly due to demographic changes (specifically the age group from 55-64). Both those have been obvious for quite some time.
Not bad, not great. You are in luck if you are looking into such lucrative fields as school desk scrapers, cotton candy machine operaters, wheelbarrow drivers, and pencil sharpener repair technicians.
The big problem is quality job creation.
@Tyrell:
You’re not living in a region where actual job creation is going on, right?
The unemployment rate here in San Francisco and down to Silicon Valley is under 4% – and it’s a very competitive research and development, technology and biotech driven labor market.
@Bill Lefrak: having women paid equally to men is a job killer, huh?
Doug:
It would be good to have state specifically what you would consider a “great” jobs report.
Inquiring minds want to know.
@Crusty Dem: The subduction zone is over 100 miles off the coast making the epicenter from the quake 200 miles from the Willamette valley. While we can see evidence of earthquakes on the coast there is little evidence in the valley. The tsunami may move up the Columbia river but it’s impact will be limited by the 90 degree bend in the river NE of Portland.
I see attempts were made, and failures had. The post recession economy has simply not produced enough jobs for prime working age people. Kids are staing in school. Older people are holding onto jobs. Let’s stick a fork in the LFPR falling due to the over 65 crowd.
The kids thing and the prime working age problem accelerated post 2008. The prime working age problem and over 65ers holding on has its origins in the mid 90s.
Here’s some data pulled apart for real analysis and contemplation. Not the childishly superficial crap Clavin and others put out. This is why people are in actuality hurting and unhappy, why all the manufacturing statistics are flashing recession, and evidence that only the subsidized sectors are really anything better than comatose now.
http://www.zerohedge.com/news/2015-12-05/these-aint-your-grandfathers-jobs-why-fridays-rip-should-be-sold
BTW – Michael, if you want to compare to Europe you need a different set of metrics, like jobs created to base number of jobs pre and post recession, or jobs relative to an accurate measure of GDP pre and post. And that still doesn’t deal with job composition. You’ve just compared apples to oranges.
I know you have self identified in the past as not being terribly good with math, Michael. But here is a taste of what I’m talking about. And even this treatment doesn’t deal with job quality.
http://www.politifact.com/truth-o-meter/statements/2015/jan/21/barack-obama/obama-obama-2010-us-has-created-more-jobs-all-adva/
I am constantly amazed at how prolific Doug Mataconis is in producing these blog posts. But when it comes to economic issues there is a lot of cut and paste. It may serve the Clavins of the world just looking for sound bites to glorify their hero, or trade association economists or, god forbid, a big bank, but there is a lot more going on than summary or headline level stats. And that’s why the disconnect between people’s real lives and blog comment sections.
@al-Ameda: Around here the textile and furniture industries were dominant, with the mills running 24/7. But in the 70’s bad trade deals sold them out and they went into decline. Now there are empty mills everywhere, and the mill villages are gone: a way of life disappeared.
“Buy American”