Haver Analytics
Haver Analytics
| Dec 08 2023

U.S. Payroll & Earnings Growth Improve in November; Unemployment Rate Declines

  • Moderate October jobs gain is unrevised; September strength lessened.
  • Earnings growth edges up, exceeding expectations.
  • Lower jobless rate accompanies strong employment & labor force gains.

Moderate growth describes the November job market report. Nonfarm payrolls increased 199,000 (1.8% y/y) after rising an unrevised 150,000 in October and 262,000 in September, revised from 297,000. So far this year, payrolls have risen an average 232,000 per month after an average 399,000 in 2022. The latest increase compared to expectations for a 190,000 gain in the Action Economics Forecast Survey.

Average hourly earnings rose 0.4% in November following an unrevised 0.2% October gain and a 0.3% September increase, revised from 0.2%. The 4.0% y/y earnings increase remains well below a high of 5.9% y/y in March 2022. A 0.3% November gain had been expected.

The unemployment rate, measured in the household survey, declined to 3.7% in November from 3.9% in October. It was the lowest rate since July but was higher than its 3.4% April low. Expectations had been for a 3.9% rate. Household employment rose 747,000 after declining 348,000 in October. The labor force increased 532,000 following a 201,000 decline. The overall unemployment rate, including workers who were marginally attached & working part-time for economic reasons, fell to 7.0% last month and reversed its October increase to 7.2%. The rate has been trending higher since its 6.5% December 2022 low.

In the establishment survey, private-sector employment increased 150,000 (1.6% y/y) after increasing 85,000 in October. Factory sector jobs rose 28,000 (2.2% y/y) after a 35,000 October decline. Construction sector employment rose 2,000 (2.6% y/y) after a 25,000 October increase.

Private service-producing employment improved 121,000 (1.7% y/y) after rising 95,000 in October. Industry performance remained mixed. Trade, transportation & utilities employment fell 35,000 (+0.3% y/y) but leisure & hospitality payrolls rose 40,000 (3.2% y/y). Education & health care jobs gained 99,000 (4.2% y/y) while professional & business jobs fell 9,000 (+0.9% /y), including a 13,600 decline (-5.1% y/y) in temporary help employment. Financial sector employment improved 4,000 (0.6% y/y) and information sector payrolls rose 10,000 (-3.1% y/y) following six straight months of decline.

Government sector payrolls rose 49,000 (2.9% y/y) after a 65,000 October gain. Local government payrolls rose 32,000 (2.3% y/y) and state government jobs increased 17,000 (4.5% y/y). The number of federal government jobs held steady (+2.9% y/y).

The 0.4% gain in private-sector average hourly earnings reflected a 0.5% rise (5.3% y/y) in goods-producing earnings. Construction sector earnings rose 0.5% (4.9% y/y) and factory sector earnings strengthened 0.6% (5.3% y/y). In the private services sector, earnings rose 0.3%. The 3.6% y/y increase remained well below its high of 6.1% in March 2022. Leisure & hospitality earnings increased 0.6% and 4.6% y/y, still well below the 14.0% y/y peak in December 2021. Information sector pay rose 0.5% (2.3% y/y). Financial activities earnings surged 0.5% (5.5% y/y). Trade, transportation & utilities sector pay rose 0.3% (4.2% y/y) last month. Professional & business sector earnings improved 0.4% (4.1% y/y) while private education and health services pay edged up 0.1% (2.5% y/y) after two consecutive 0.2% monthly increases.

The length of the average workweek improved to 34.4 hours in November but remained below a peak of 35.0 hours in January 2021. The workweek in the goods-producing sector held steady at 39.9 hours. The construction sector workweek improved to 39.3 hours, while the factory sector workweek held at 40.0 hours. The average workweek in the private service sector was steady at 33.3 hours for the ninth straight month but remained below the 34.0 hour high early in 2021. Financial sector hours have been unchanged at 37.4 hours but information services hours slipped to 36.0 hours. Professional & business service hours rose to 36.5 hours while leisure & hospitality hours were unchanged at 25.5 hours in November.

The private sector’s aggregate weekly hours index, a key indicator of production and income, rose 1.3% (+0.9% y/y) in November but has risen only 0.3% on average so far in the fourth quarter.

In the household survey, the lower 3.7% unemployment rate in November was accompanied by a higher 62.8% labor force participation rate. It has been trending higher from a low of 61.3% in January 2021. The participation rate for teenagers fell to 37.5% from a 14-year high of 37.9% in October. For workers aged 20-24, the rate eased to 71.6% and compared to a high of 72.0% in February & March. For workers aged 25-54, the rate held steady at 83.3% in November, but was increased from 81.9% two years earlier. For individuals 55 and over, the rate improved to 38.8% in November but remained well below its 40.5% peak in July 2019.

The employment/population ratio for all workers rose to 60.5% from a low of 51.3% in April 2020. It remained below its reading of 61.1% in February 2020 just prior to the pandemic.

The average duration of unemployment fell sharply to 19.4 weeks in November from 21.6 weeks in the prior month. The median duration of unemployment rose, however, to 9.2 weeks and reversed October’s decline. It remained below the 19.9-week high in June 2021.

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.

  • Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio.   Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984.   He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C.   In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists.   Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.

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