Economy Adds 228,000 New Jobs in November Earnings Growth Jumps to 3.1%; Unemployment Rate Holds at 4.1%

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Number of payroll jobs INCREASED 228,000 in November;
  • Prior month job totals REVISED DOWN 37,000: DOWN 17,000 in October to a gain of 244,000 (from the initial report of a 261,000 increase) and DOWN 20,000 in September to a revised growth of 18,000 jobs (from 38,000);
  • Average weekly earnings ROSE $4,38 to $915.98, a 3.1 percent year-year gain following a $1.03 decline in October;
  • Unemployment rate FELL in November remained at 4.1 percent, lowest since December 2000 when it was 3.9 percent;
  • The number of persons holding multiple jobs ROSE 135,000 in November suggesting less than half of the new jobs went to people who were unemployed;
  • The labor force (the sum of employed and unemployed) ROSE 148,000 following a 765,000 drop in October;
  • Both employment and unemployment barely INCREASED in November: The number of persons employed ROSE 57,000 and the number unemployed went up 90,000.
  • The number of persons not in the labor force ROSE 35,000;
  • Average workweek ROSE to 34.5 hours, the first increase in the work week since June;
  • Private sector payrolls ROSE 221,000 in November; Government payrolls (federal, state and city) ROSE 7,000 with virtually all the gain coming at the local level;
  • Number of construction jobs INCREASED 24,000, with 15,000 new residential constructions jobs continuing to reflect the rebuild following hurricanes Harvey and Irma
  • Number of retail jobs ROSE almost 19,000 – the strongest month-month growth gain in that sector since January.

Image result for employment situation

Just as previous reports of employment sector growth require a deeper read than the headline numbers, the Bureau of Labor Statistics report for November may not be all it seems at first blush.

Yes, the report told a tale of 228,000 new payroll jobs in November—the third strongest month-month gain of the 10-month old Trump Administration — but also scaled back the growth previously reported for September and October.

And while reporting 228,000 new jobs, the BLS release also noted the number of multiple jobholders accounted for more than half of the increase.

Perhaps most encouraging was the $4.38 increase in average weekly earnings which means year-over year earnings are up 3.1 percent, the strongest year-year increase since December 2010. Part of the growth in average weekly earnings was a catch-up. Average weekly earnings had declined $1.03 in October.

While the earnings growth is encouraging there were a couple of factors contributing:

  • A relatively low 17.6 percent of total employment was classified as part time, the lowest percentage since October 2008;
  • Leisure and Hospitality jobs – which include restaurant workers –typically the lowest paying jobs added 32,700 jobs only 6.1 percent of the total

The federal reserve’s favorite employment measure: employment ratio or E-POP meaning 39.9 percent of the over-16 population was not working (some because they were in school or unable to work for other reasons). The ratio has dropped from a post-recession peak of 60.5 percent achieved just two months ago.

Even the steady low unemployment of 4.1 percent, matching October for the lowest in almost 17 years, came with an asterisk due to the slow growth of the entire labor force.

The number of persons employed full-time rose to 5.0 percent of the total number employed. There could be positive news in the increase in the average workweek to 34.5 hours which suggests employers might be looking to increase payrolls, or as a flip side may be reluctant to increase staff and instead try to get more out of existing workers.

The BLS report does call into question the need for the massive tax cut under Congressional consideration as an economic stimulus.

The economy has created 1.7 million new jobs in the Trump Administration, so the explanation that we need the tax cut to create jobs may not hold up under scrutiny.

 Hear Mark Lieberman every Friday morning at 6:20 am on The Morning Briefing on POTUS on Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

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