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Employment: Surprise Miss, Details Much Better Than Headline

December 3, 2021
Bottom Line: November's payroll employment rose much less than expected, up just over 210k versus 550k expected, but the household survey used to calculate the unemployment rate showed over 1.1 million new jobs. While survey sampling and seasonal adjustments remained difficult and continued to create volatility (non-seasonally adjusted nonfarm payrolls rose over 700k), the trend remained impressive, despite the headline miss. Within the payroll survey, retail trade, education, and health sector jobs appeared to be skewed lower by seasonal adjustments. The labor force participation increase and substantial gains reported from the household survey were more than enough to make up for any one-off disappointment in the headline nonfarm payroll figure. Average hourly earnings decelerated just a touch, but weekly earnings were higher as hours worked increased. Overall, this was a solid report once we get past the headline and won't change the Fed policy trajectory Powell started to outline in his Congressional testimony this year.
Payroll Employment rose by 210k in November, compared with market expectations for an increase of 450k. The prior 2 months were revised, higher in October by 15k and higher in September by 67k.
Government jobs FELL by 25k. Consequently, private sector jobs ROSE by 235k.   Overall employment is now 4.1% ABOVE its year-ago level.
Over the past 12 months, 5.8M jobs have been created. In November, the job gains were in:
  • Trade, Transportation & Utilities (+57k with -20k of those in Retail Trade),  
  • Professional & Business Services (+90k with the addition of 6.2k in Temp Help Services),  
  • Construction (+31k),
  • Leisure & Hospitality (+23k),
  • Financial Activities (+13k),
  • Other Services (+10k), and
  • Education & Health Services (+6k).
Jobs were shed in Information (-2k), and Government (-25k).
The Unemployment Rate FELL by 0.4 percentage points in November to 4.2%, compared with market expectations for a small increase to 4.7%.  Household employment rose by 1136k while the labor forceincreased by 594k, resulting in a decrease in the number of unemployed of 542k.
The Labor Force Participation Rate ROSE by 0.2 percentage points to 61.8%. The Employment-Population Ratio ROSE by  0.4 percentage points to 59.2%. The number of people Working Part-Time for Economic Reasons FELL by 4328k to 00k. while Long-Term Unemployment FELL by 136k to 2,190k (accounting for 31.8% of the unemployed),  while the Mean Duration of Unemployment ROSE by 2.2 weeks to 28.9 weeks.There are now 6.9 million people officially unemployed. In addition, there are another 5,859k people who say they want a job but are not currently looking for one.
The Index of Aggregate Hours ROSE by 0.5%, combining the moderate gain in private payroll employment and the longer workweek.
Hourly Earnings ROSE by 0.3% in November, below market expectations of 0.4%. Hourly earnings are now 4.8% ABOVE their year-ago level.
Weekly Earnings also ROSE by 0.5%, the result of the change in hourly earnings and a longer workweek. Weekly earnings are now 4.8% ABOVE their year-ago level. The Average Workweek ROSE by 0.1 to 34.8 hours, ABOVE the market consensus at 34.7 hours.