The US economy added 227,000 jobs in November, the BLS said Friday.
The NFP headline was remarkable mostly for being bang-on the collective wisdom of economists. By the time the numbers hit, consensus was 220,000.
October’s weather-blighted low print was revised to show a 36,000 headline gain, triple the initially-reported addition. September’s headline was bumped up by 32,000 in the final revision — it now reflects a 255,000 gain.
Between November’s strong headline showing and the 56,000 combined upward revision to the prior two months, the three-month moving average is now 172,000, the highest since May.
Gains were led by healthcare, leisure and hospitality and government. Get those government jobs while you can, folks, Elon’s comin’ to cut ’em. (Private hiring undershot for November with a 194,000 gain against estimates for 205,000.)
The transportation equipment manufacturing category bounced back for obvious reasons (the Boeing strike ended). Retail saw a big loss in November (-28,000). Maybe some of those jobs will come back in December on seasonal hiring.
The unemployment rate unexpectedly ticked up to 4.2%, and the labor force participation rate slipped a second month to 62.5%. That’s not a good combination, and it may take some of the edge off the robust headline print for the purposes of monetary policy.
And yet, average hourly earnings came in warm, rising 0.4% MoM. Economists expected 0.3%. November’s release marks the third 0.4% (rounded) AHE print in four releases.
As the figure shows, there’s an upward trend if you squint. The YoY print, 4%, was likewise a touch warmer than consensus expected.
That nascent wage reheat feels consistent with a similar temperature increase observed in the ADP “pay insights” series, and also with the first uptick in the quit rate (from the October JOLTS report) in 17 months.
All in all, I’m not sure anyone should be enamored with this release. The headline was strong, which is good, and it’s not so strong as to dissuade the Fed from a December rate cut, also good. But the household survey showed a second straight large drop, and the 355,000 decline for November made for a rather distasteful encore on the heels of October’s 368,000 decline.
As the figure shows, the disparity between the two series is widening out. As such, it’ll remain topical, particularly among dedicated bears. And, to reiterate, a rising jobless rate with a falling participation rate is a bit of a bitter pill.
On the wages front, I’m the last person to lament pay gains for working people (that’d be distasteful coming from someone who’s only punched a clock for 17 months in his entire adult life), but the monthly AHE prints really need to round to 0.3% not 0.4%. (Pay growth for “regular” — i.e., nonsupervisory — employees was 0.3% in November.)
Oh, and do note: The to-the-decimal UNR for November was 4.246%, which is to say a rounding error away from matching July’s “cycle” high at 4.3%.
You lasted 17 months? Someday, I hope to be able to reconcile my mental image vs. reality. 🙂
I know. A lot of it was on the road, though. Was only in the office in NY for maybe 1/3 of that 17 months.
My first job ever, working at the local AMC 8 (a great job if you’re in high school: unlimited free popcorn and coke, plus you can get your friends in to movies free–not like sneak them in, but tell the manager, “Hey, these are my friends, I’m letting them in,” and it’s fine), was the only job I ever worked that had a literal punch clock. Loud noisy bugger that made a great thump as it stamped your card. It only paid minimum wage, but the perks were absolutely worth it. Not to mention $4.25 went a lot further back then.