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Employment: Strong Gains Led By Autoworkers

December 6, 2019

Bottom Line: The rebound in manufacturing jobs following the GM autoworker strike was sharper than expected in November. But job gains extended into the services sector with retail, health care and business service jobs jumping. Ahead of the holiday shopping season net hiring across department stores and internet retailers jumped to the highest level in over 5 years. Additionally, there were upward revisions to prior payroll data that brought the three- and six-month averages above the 12-month averages, suggesting a turn higher in the hiring trend after slow job growth early this year. The household employment report, used to measure the unemployment rate, grew more slowly but still outpaced the growth in the labor force, pushing the unemployment rate lower by a tenth. Finally, wage growth was solid, and there were upward revisions to prior months' average hourly earnings. Total paycheck growth accelerated in recent months, pushing back towards the strongest year-on-year gains of the cycle. Overall, this was a strong report even if one excluded the impact of the autoworkers.

Payroll Employment rose by 266k in November, compared with market expectations for an increase of 180k. The prior 2 months were revised, higher in October by 28k and higher in September by 13k.

Government jobs ROSE by 12k. Consequently, private sector jobs ROSE by 254k. Overall employment is now 1.5% ABOVE its year ago level, Over the past 12 months, 2,204k jobs have been created.

In November, the job gains were in

  • Trade, Transportation & Utilities (-9k with 23k of those in Retail Trade),
  • Professional & Business Services (+49k with the addition of 6.5k in Temp Help Services),
  • Education & Health Services (+60k),
  • Manufacturing (+54k),
  • Leisure & Hospitality (+45k),
  • Information (+13k),
  • Information (+13k), and
  • Government (+12k).

The Unemployment Rate FELL by 0.1 percentage points in November to 3.5%, compared with market expectations for a no change to 3.6%.

Household employment rose by 83k while the labor force increased by 40k, resulting in a decrease in the number of unemployed of 44k.

The Labor Force Participation Rate FELL by 0.1 percentage points to 63.2%.

The Employment-Population Ratio was UNCHANGED at 61.0%.

The number of people Working Part-Time for Economic Reasons FELL by 86k to 4,251k. while Long-Term Unemployment FELL by 40k to 1,224k (accounting for 21.1% of the unemployed), while the Mean Duration of Unemployment FELL by 1.6 weeks to 20.2 weeks.

There are now 5.8 million people officially unemployed. In addition, there are another 4,831k people who say they want a job but are not currently looking for one. Finally, another 4,251k people are working part-time because of slack economic conditions.

The Index of Aggregate Hours ROSE by 0.2%, combining the moderate gain in private payroll employment and the steady workweek.

Hourly Earnings ROSE by 0.2% in November, below market expectations of 0.3%. Hourly earnings are now 3.1% ABOVE their year ago level.

Weekly Earnings also ROSE by 0.2%, the result of the change in hourly earnings and a steady workweek. Weekly earnings are now 3.1% ABOVE their year ago level.

The Average Workweek was UNCHANGED at 34.4 hours, in line the market consensus at 34.4 hours.

Article by Contingent Macro Advisors