Notes on the U.S. Employment Situation for November 2018

U-Rate: 3.7%; Jobs: +155,000

OVERVIEW

The unemployment rate remained at 3.7 percent in November with payrolls expanding by 155,000 jobs, according to the Bureau of Labor Statistics.

The Labor Force Participation (LFP) rate remained at 62.9 percent. The Employment-Population ratio also remained at 60.6 percent. The number of unemployed dropped from October to November by 100,000 from 6.075 million to 5.975 million.

Job gains took place in Health care (+32,000) and Manufacturing (+27,000) and Transportation and Warehousing (+25,000).

In addition, Professional and Business Services added 32,000 jobs while Retail Trade added 18,000 jobs.

According to the BLS, the following sectors saw little or no change in employment: Mining, Wholesale Trade, Information, Financial Activities, Leisure and Hospitality, and Government.

Over the year, average hourly earnings have increased by 81 cents or 3.1 percent. In November the average hourly private non-farm wage rang in at $27.35, an increase of six cents. The average workweek for all employees decreased by 0.1 hour to 34.4 hours in November.

ANALYSIS

Total non-farm payroll employment only rose by 155,000 in November and the unemployment rate remained at 3.7 percent for the third consecutive month. This week, Wall Street expected a payroll increase by 197,000 jobsThe BLS reported 161,000 new private sector jobs were created compared with the estimate from the ADP payrolls report released earlier this week of 179,000 private payrolls. The number of persons employed part-time for economic reasons remained at 4.8 million. The number of long-term unemployed was dropped by 120,000 to 1.25 million. This group represents 20.8 of all unemployed persons. Revisions to the previous two months showed there were 12,000 less new jobs. October was revised down to 237,000 from 250,000 and September was revised up to 119,000 from 118,000. November’s payrolls number was below the 2018 monthly average of 208,000 jobs per month. Still, there’s only a smaller number of jobs slated to come online. “The economy only needs to create 60,000 to 70,000 jobs to keep pace with the growth of the working-age population, so job growth is still strong,” Julia Pollak, labor economist at ZipRecruiter told MarketWatch.com. Despite the turmoil in the stock market, workers are enjoying wage gains. Wages rose 3.1% over the prior year, the fastest pace of annual wage growth since April 2009 according to Yahoo Finance. Even with lower payroll growth, the economy faces a shortage of workers.

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