The employment report continues to report a sluggish economy and employment growth. The payroll report showed a gain of 120,000 jobs in November, consisting of a 140,000 gain in private payrolls and a 20,000 drop in government employment.
The household survey months showed the stronger gains it has in recent with a gain of some 278,000 jobs. With this 278,000 gain the unemployment rate fell -0.4% from 9.0% to 8.6%. The jobs gain alone was not enough to generate a 0.4% drop in the unemployment rate as the participation rate also fell-0.2%. On a monthly basis this is a very noisy indicator and when you look at the last few months data the participation rate actually appears to be bottoming– just the opposite conclusion that the headline suggest.
Moreover, employment as a percent of the population actually rose last month, reinforcing the point that this one months drop in the participation rate is noise, not a trend. November is the month when part time employment for the Christmas season starts and this can cause data problems.
The work week for all employees was unchanged at 33.4 hours while the average workweek for
nonsupervisory workers fell from 33.7 to 33.6 hours. As a consequence the index of aggregate hours worked for nonsupervisory workers fell -0.1%. Over all this does not appear to be a trend change and could very well be revised away.
Average hourly earnings for all employees fell from $23.20 to $23.18 while for nonsupervisory employees it rose from$19.53 to $19.54. Overall average hourly wage growth continues to slow and still is threatening to hit a new all time low.
Moreover, average weekly wages are also stagnating and the recent strength in consumer spending stems more from a falling savings rate rather than a surge in income.
Sorry to be so slow to post this mornings, but the BLS web site was overwhelmed this morning and it took a long time to download the data.