The November’s jobs report was below expectations, showing 210,000 nonfarm jobs added last month and earnings continued rising slower than inflation.
The unemployment rate fell 0.4 percentage points to 4.2%, while the labor force participation rate increased slightly to 61.8%—still well below its 63.3% level in February 2020, the last month before the pandemic.
The number of unemployed fell 542,000 to 6.9 million. That is 2.2 million more unemployed than in February 2020.
Private sector employment increased by 235,000, with the service sector continuing to provide the bulk of new jobs.
Professional and business services was the strongest sector in November, adding 90,000 jobs.
Transportation and warehousing picked up considerably, adding 49,700 jobs.
Both the manufacturing and construction sectors added 31,000 jobs.
After adding 170,000 jobs the previous month, leisure and hospitality slowed significantly in November, adding only 23,000 jobs.
The retail sector lost 20,400 jobs last month, even as the nation goes into the holiday shopping season; the industry continues to experience difficulties in the wake of government-imposed restrictions and coronavirus fears.
Oil and gas extraction lost 1,200 jobs, despite rising energy prices, erasing the small gain in October.
The health care sector was flat for the month, with only 2,100 jobs added.
Government jobs continued declining in November, falling 25,000. The loss was seen across all levels of government, but more than half of those losses were in local government education, continuing the substantial downward trend in that subsector.
Earnings, Revisions, Miscellaneous
Average hourly earnings rose for the eighth consecutive month in November, adding 8 cents to $31.03 while the average workweek increased slightly to 34.8 hours. Despite earnings rising 4.8% over the last 12 months, inflation has increased faster over that same period.
September nonfarm payroll was revised up 67,000 to 379,000 and October was revised up 15,000 to 546,000. September and October combined revisions are 82,000 higher than the previous estimate.
Prime-age (25-54 years old) employment had a healthy increase of 617,000 but is still 1.9 million below its February 2020 level.
The labor force grew by 594,000 in November and the labor force participation rate increased slightly to 61.8%, still 1.5 percentage points below February 2020.
The employment-population ratio increased 0.4 percentage points to 59.2%. It remains 2.4 percentage points below February 2020.
There was a big difference between the two surveys that are used in composing the monthly jobs report. Each uses its own methodology. The household survey includes people on unpaid leave, agricultural workers, and the self-employed, while the establishment survey does not. For example, if someone is placed on unpaid leave after refusing a vaccine, that person is counted as employed in the household survey but not the establishment survey.
November’s jobs report is a mixed bag. While the household survey showed a seasonally adjusted 1,136,000 jobs added, the establishment survey badly missed expectations with only 210,000 jobs added. Nonfarm employment is down 3.9 million from February 2020. Additionally, wages are rising less than inflation, showing an erosion of workers’ purchasing power and a decline in real income. People returning to the labor force is an improvement, but labor force participation is significantly below the February 2020 level.
Vaccine mandates are creating uncertainty as they work their way through the court system. These mandates should be abandoned immediately.
The Build Back Better Act currently being debated in Congress contains large incentives to not work. That legislation should be rejected.
The Federal Reserve should act immediately to rein in inflation.