·
The 94,000 worker rise in nonfarm payrolls in November reported today by
the Bureau of Labor Statistics was a bit stronger than early
expectations for a 70,000 increase. However, it was much weaker than
forecasts which were ratcheted up after Wednesday's ADP report of a
strong gain in private nonfarm payrolls. And while the increase was
accompanied by a slight upward revision to the gain in October jobs, the
rise in September employment was more than halved to 44,000.
· The unemployment rate held steady at 4.7% last month. Household employment surged 696,000 (0.7% y/y) and more than offset the prior month's 250,000 decline. The labor force also surged 617,000 (0.9% y/y). The labor force participation rate jumped to 66.1%, its highest level since July but still down from 66.2% averaged last year.
· The level of average hours worked
has remained notably stable recently. As a result, for the fourth
quarter so far the level of aggregate hours worked (employment times
hours) is up just 0.9% (AR) following a 3Q rise of 1.2%. During the last
ten years there has been a 44% correlation between the gain in hours and
the gain in real GDP. That correlation is down from 56% over the last 20
years and from 74% over the last 30 due to the faster growth in worker
productivity.
· Private service sector jobs increased 97,000 (1.7% y/y) last month after an unrevised gain of 154,000 in October. Retail employment grew 24,200 (0.4% y/y) and professional & business service jobs rose 30,000 (1.8% y/y). Jobs in the education sector ticked up 2,000 (2.6% y/y) while the health care sector added 25,300 workers (3.2% y/y). Employment in the temporary help industry rose by 11,300 (-1.2% y/y).
· Job losses in the service sector were logged in the finance industry. The 20,000 worker decline (-0.1% y/y) was the fifth decline in the last six months. In addition, following the drop off in the housing industry, real estate employment fell 10,800 (-0.2% y/y) for the second decline in the last three months.
· Employment in the government sector
also rose a modest 30,000 (1.1% y/y) after a 38,000 worker increase in
October. Very weak hiring by the Federal government (-0.3% y/y) has held
back gains in the total.
· Factory sector payrolls fell further by11,000, adding to a decline that began early last year. These declines remain at odds with the ISM reports of job growth in manufacturing. Construction employment fell 24,00 last month.
· Average hourly earnings increased 0.3% while the prior month's gain was revised down sharply and now shows a decline of 0.2%. Factory sector earnings bounced back 0.4% (2.7% y/y) from a 0.3% decline in October which was initially reported as an increase. Private service-providing earnings rose 0.3% (3.9% y/y) following a 0.2% October decline that also was originally reported as an increase.
· The minimum wage and the labor market from the Federal Reserve Bank of Cleveland can be found here.
· Fed Governor Randall S. Kroszner's speech titled Loan Modifications and Foreclosure Prevention is available here.