Employment: Continued Job and Wage Gains

Bottom Line: Job gains in November were nearly as strong as in October, coming in better than expected. Average hourly earnings rose 0.6%, double expectations with positive revisions to previously reported data. Wage gains in transportation and warehousing, within the broader "trade, transportation, and utilities" sector drove the increase, up 2.5% on the month. Also within the same category, we saw a sharp drop in retail trade jobs, partially a symptom of less hiring at brick-and-mortar establishments but also a result of difficult seasonal adjustments since the pandemic. Among the higher-paying sectors, the healthcare sector saw continued solid job and wage gains. Countering the robust establishment survey data, the household survey showed a decline for the second consecutive month, keeping the unemployment rate at 3.7% as the labor force participation inched lower. Overall, this was another solid labor report, as the trend rate of job growth is decelerating only very slightly. Given the Fed's focus on the strength of the labor market as a critical factor behind sustained inflation, this report will likely be fodder for the hawks that they need to continue to hike rates.

Payroll Employment rose by 263k in November, compared with market expectations for an increase of 200k. The prior 2 months were revised, higher in October by 23k and lower in September by 46k. Government jobs ROSE by 42k. Consequently, private sector jobs ROSE by 221k.   Overall employment is now 3.3% ABOVE its year-ago level. Over the past 12 months, 4,896k jobs have been created.Jobs were shed in trade, while most sectors added:

The Unemployment Rate was UNCHANGED in November at 3.7%. Household employment fell by 138k while the labor force declined by 186k, resulting in a decrease in the number of unemployed of 48k. The Labor Force Participation Rate FELL by 0.1 percentage points to 62.1%. The Employment-Population Ratio FELL by  0.1 percentage points to 59.9%.The number of people Working Part-Time for Economic Reasons ROSE by 46k to 3,623k. while Long-Term Unemployment ROSE by 65k to 1,230k (accounting for 20.5% of the unemployed),  while the Mean Duration of Unemployment ROSE by 0.6 weeks to 21.4 weeks.There are now 6.0 million people officially unemployed. In addition, there are another 5,550k people who say they want a job but are not currently looking for one.  Finally, another 3,623k people are working part-time because of slack economic conditions.The Index of Aggregate Hours FELL by 0.2%, combining the solid gain in private payroll employment and the shorter workweek.Hourly Earnings ROSE by 0.6% in November, above market expectations of 0.3%. Hourly earnings are now 5.1% ABOVE their year-ago level. Weekly Earnings also ROSE by 0.3%, the result of the change in hourly earnings and a shorter workweek. Weekly earnings are now 3.9% ABOVE their year-ago level. The Average Workweek FELL by 0.1 to 34.4 hours, BELOW the market consensus at 34.7 hours.