The Employment Situation

The employment report was better than expected as Sandy apparently did not have the widely expected negative impact.  But the data essentially shows that the recent trend of weak employment continued as payrolls expanded some 146,000 and the household survey showed a -122,00 drop.

Private payrolls expanded some  147,00 as government employment fell about 1,000.  The expansion of private payrolls  was within the range of recent reports.

The year over year change in both measures — to smooth out monthly noise — is still about the same..


The unemployment rate fell to 7.7% , but the drop was due more to -350,000 contraction in the labor  force than higher employment.


The average workweek was stable at 33.4 hours and the index of aggregrate hours worked rose 0.2%.
For production or nonsupervisory hours worked expanded 0.4%– a little better than the total.

 Average hourly earnings  rose from $23.59 to $23.69.  But its growth is still at record lows.

Average weekly earnings growth remained very weak at about  1.7%.  This is in sharp contrast to the widespread expectations  that income will spike higher in the 4th quarter as individuals shift income from 2013 back to 2012 to avoid or minimize the expected tax rate increase in 2013.But the hourly wage employees in this report have little or no ability to shift income.