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Economy in Brief

U.S. Payroll & Earnings Firm in November; Jobless Rate Is Unchanged
by Tom Moeller  December 2, 2022

• Payroll employment increases steadily across most sectors.

• Monthly wage growth accelerates.

• Unemployment rate remains near expansion low.

Nonfarm payrolls increased 263,000 in November following an increase of 284,000 in October and 269,000 in September, revised from 261,000 & 315,000, respectively. Expectations had been for a 195,000 rise in the Action Economics Forecast Survey. The average 272,000 rise during the last three months remains below a three-month high of 602,000 in February of this year. It stands above, however, its 164,000 per month average in the year prior to the pandemic.

Average hourly earnings rose 0.6% last month after increasing 0.5% in October and 0.4% in September, revised from 0.4% and 0.3%, respectively. A 0.3% November rise had been expected. The 5.1% y/y earnings gain remains above its 2.9% y/y rise before the pandemic with increasing competition for labor.

The unemployment rate, measured in the household survey, held at 3.7% last month, as expected. Household employment declined 138,000 after falling 328,000 in October. The labor force fell 186,000, the largest of three consecutive months of decline. The overall unemployment rate, including workers who were marginally attached & working part-time for economic reasons, eased to 6.7%, about where it's been for six months.

In the establishment survey, the moderation in payroll job growth occurred as private sector employment rose 221,000 (3.5% y/y) after rising 248,000 in October. The increase reflected a 14,000 (3.3% y/y) gain in factory sector jobs which came after a 36,000 rise. Construction sector employment increased 20,000 (3.2% y/y) following a 9,000 October improvement. Mining & logging employment rose 3,000 (9.2% y/y), about as it did in the prior two months.

Private service-producing sector employment increased 184,000 in November (3.5% y/y) after improving 201,000 in October. Increases varied greatly amongst service sector categories. Leisure & hospitality employment strengthened 88,000 (7.2% y/y) after a 60,000 gain. Education & health care jobs rose 82,000 (3.9% y/y) about as it did for four straight months. Information services jobs grew 19,000 (5.6% y/y) after increasing 6,000. Financial activities employment grew 14,000 (1.7% y/y) after rising 13,000. Professional & business services employment increased 6,000 (3.2% y/y) after rising 26,000 in October. Within that category, the number of temporary help jobs declined 17,200 (+0.9 y/y). To the downside, employment in trade, transportation & utilities fell 49,000 (+1.9% y/y) as retail employment decreased 29,900 (+0.9% y/y). Jobs in "other service" industries gained 24,000 (3.4% y/y).

Government sector payrolls rose 42,000 last month (1.4% y/y) after increasing 36,000 in October. Local government jobs increased 32,000 (1.9% y/y), about as they did in October. State government employment rose 11,000 (1.2% y/y) after holding steady in October. Federal government payrolls slipped 1,000 (-0.5% y/y) after rising 5,000 in October.

Private-sector average hourly earnings rose 0.6% in November. Earnings in the goods-producing sector rose 0.2% (4.4% y/y) after increasing 0.5% in October. The 4.4% y/y rise remained below the 5.2% y/y March high. Earnings in construction rose 5.8% y/y followed by a 3.6% y/y gain in the factory sector which was below its 5.2% January peak. In the private services-producing sectors, earnings rose 0.6% (5.3 y/y) following A 0.5% increase. Information service sector earnings strengthened 1.6% m/m and the 8.7% y/y gain was increased from stability y/y last fall. The 6.4% y/y rise in leisure & hospitality earnings remained below the 13.3% December peak, and professional & business sector earnings increased 5.4% y/y, down from 7.0% in March. The gain in financial activities earnings held steady at 3.7% y/y and remained below the 7.8% March 2021 peak.

The length of the average workweek dipped to 34.4 hours in November after five straight months at 34.5 hours. These readings remained below the 35.0 hour high reached in January of last year. The workweek in the goods-producing sector fell to 39.7 hours after trending near 40.0 hours since late-2020. The construction sector average workweek fell sharply to 38.4 hours and the factory sector workweek edged lower to 40.2 hours. The average workweek in the private service-producing sector held at 33.4 hours but it remained below the 33.9 hour high in early-2021. The aggregate weekly hours index, a key indicator of production and income, fell 0.2% m/m in November and the 2.4% y/y rise remained below last year's 5.5% increase.

The household survey indicated a steady jobless rate of 3.7% as the size of the labor pool dropped for a third month to the lowest level since July. The labor force participation rate fell to 62.1% last month from 62.2% in October. It remained below the high of 63.4% early in 2020. The rate for teenagers rose to 37.8%. For workers aged 20-24, the rate eased to 70.6 % and remained below a 72.0% December, 2021 high. For workers aged 25-54, the rate eased to 82.4% but remained close to the highest rate since before its collapse in the 2020 recession. For individuals 55 and over, the rate fell to 38.6%, reversing two months of increase.

The employment/population ratio for all workers in November eased m/m to 59.9%, but remained above the 59.3% level twelve months earlier. It is still below its reading of 61.2% in February, 2020 just prior to the pandemic.

The average duration of unemployment rose in November to 21.4 weeks but remained below a 31.6 week high in June of last year. The median duration of unemployment rose to 8.4 weeks but stood below its 19.6 high in June 2021. The ranks of those individuals unemployed for 27 weeks or more rose sharply by 5.6% m/m, but remained down 43.9% y/y.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's USECON database. Detailed figures are in the EMPL and LABOR databases. The expectations figures are in the AS1REPNA database.

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