November Employment Situation

Employment data continued to improve in November according to the Bureau of Labor Statistics. The economy created 203,000 jobs for the month. This is an improvement over October’s increase of 200,000, which was revised down slightly. The unemployment rate fell to the lowest level since November 2008 and is now 7.0 percent.

The majority of the newly employed found work in the private sector. The service sector added 152,000 new workers while the goods producing portion of the economy added 44,000. The governments added just 7,000 of the new hires to the total; state and local governments added 14,000 new employees while the federal government continued to shed workers. In the last year, federal government employment has declined by 92,000.

Hours worked and average hourly earnings improved. The average work week ticked up by 6 minutes, and the earnings per hour grew by 0.2 percent. The increased number of hours worked and the increased pay should find their way into consumption shortly.

The pace of job creation has been relatively healthy for an extended period of time while the percent of Americans in the labor force continues to trend lower even after a slight improvement in November. In each of the last 13 months, the economy’s six-month moving average of net new hires has exceeded 150,000; during the same period, the labor force participation has declined. Because of the directions of these two measures, America’s unemployment rate has fallen. This combination of trends seems likely to continue as the country’s demographics collide with the recovering labor market. It is not hard to imagine the unemployment rate continuing to decline even as the economic expansion continues to be tepid. (by C. Cox)