Initial Reaction
Today’s employment report shows an increase of 178,000 jobs.
The employment change for October was revised down from +161,000 to +142,000, and the change for September was revised up from +191,000 to +208,000. Including revisions, job growth has averaged 176,000 over the past 3 months.
The household survey shows a gain in employment of 160,000 vs. a loss in employment last month of 43,000.
The labor force declined by 226,000 sending the unemployment rate downward. Those “not” in the labor force increased by 446,000 this month and 425,000 last month.
The two-month increase of those “not” in the labor force rose by 871,000.
Let’s dive into the details in the BLS Employment Situation Summary, unofficially called the Jobs Report.
BLS Jobs Statistics at a Glance
- Nonfarm Payroll: +178,000 – Establishment Survey
- Employment: +160,000 – Household Survey
- Unemployment: -387,000 – Household Survey
- Involuntary Part-Time Work: -220,000 – Household Survey
- Voluntary Part-Time Work: +327,000 – Household Survey
- Baseline Unemployment Rate: -0.3 to 4.6% – Household Survey
- U-6 unemployment: -0.2 to 9.3% – Household Survey
- Civilian Non-institutional Population: +219,000
- Civilian Labor Force: -226,000 – Household Survey
- Not in Labor Force: +425,000 – Household Survey
- Participation Rate: -0.1 to 62.7 – Household Survey
Employment Report Statement
The unemployment rate declined to 4.6 percent in November, and total nonfarm payroll employment increased by 178,000, the U.S. Bureau of Labor Statistics reported today. Employment gains occurred in professional and business services and in health care.
Unemployment Rate – Seasonally Adjusted
Nonfarm Employment Change from Previous Month
Nonfarm Employment Change from Previous Month by Job Type
Hours and Wages
Average weekly hours of all private employees was steady at 34.4 hours. Average weekly hours of all private service-providing employees was steady at 33.3 hours. Average weekly hours of manufacturers declined 0.2 hours to 40.6 hours.
Average hourly earnings of private workers rose $0.02 to $21.73. Average hourly earnings of private service-providing employees rose $0.01 to $21.50. Average hourly earnings of manufacturers declined $0.02 to $20.62.
Revisions take away those gains and the manufacturing loss. Here are last month’s numbers:
Average hourly earnings of private workers rose $0.04 to $21.72. Average hourly earnings of private service-providing employees rose $0.04 to $21.50. Average hourly earnings of manufacturers rose $0.05 to $20.62.
For discussion of income distribution, please see What’s “Really” Behind Gross Inequalities In Income Distribution?
Birth Death Model
Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back.
Table 15 BLS Alternate Measures of Unemployment
Table A-15 is where one can find a better approximation of what the unemployment rate really is.
Notice I said “better” approximation not to be confused with “good” approximation.
The official unemployment rate is 4.6%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.
U-6 is much higher at 9.2%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.
Strength is Relative
It’s important to put the jobs numbers into proper perspective.
- In the household survey, if you work as little as 1 hour a week, even selling trinkets on EBay, you are considered employed.
- In the household survey, if you work three part-time jobs, 12 hours each, the BLS considers you a full-time employee.
- In the payroll survey, three part-time jobs count as three jobs. The BLS attempts to factor this in, but they do not weed out duplicate Social Security numbers. The potential for double-counting jobs in the payroll survey is large.
Household Survey vs. Payroll Survey
The payroll survey (sometimes called the establishment survey) is the headline jobs number, generally released the first Friday of every month. It is based on employer reporting.
The household survey is a phone survey conducted by the BLS. It measures unemployment and many other factors.
If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.
Looking for jobs on Monster does not count as “looking for a job”. You need an actual interview or send out a resume.
These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.
Final Thoughts
This was neither a strong nor weak report this month, but it will be good enough for the Fed to hike this month.
Mike “Mish” Shedlock
We lost 628,000 full time jobs. Unadjusted. Seems bad to me.
So Mish should the incoming administration start releasing true numbers not massaged numbers so we can deal with reality if we are going to fix our system ??
What would the market do ??
I’m to the point where I don’t believe anything that comes out of this administration as it seems like one big Ponzi scheme…………………..
Average hourly earnings DOWN month-to-month.
Almost every new job in November was part-time.
Another 425,000 dropped out of the labor force.
This was not a “good” report – just a continuation of the downward spiral – where more and more of the (shrinking) workforce moves to low-paying, part-time employment.
Seasonally adjusted. That’s all that needs to be said. Just open your eyes and look around without prejudice and sway from the media, this economy is in a slow grind down. No doubt about it. I don’t prescribe to the notion that we’re falling off a cliff, but ABSOLUTELY the economy is getting worse. Plan accordingly, with a time horizon of about 5-10 years.
So what will be Trump’s take on the BLS reports? As I recall, he once contended that the true unemployment rate might be 43%! [lol]
“Americans Not In The Labor Force Soar To Record 95.1 Million”
What would the unemployment rate be if they were counted as unemployed?
4.6% is a healthy unemployment rate. People may not like the number, but it is calculated the same way prior to the Great Recession and 4.6% was a good number then too.
Lot’s of people dropped out of the labor pool, but that is not because they can’t find a job, they just can’t find a job at a pay level that makes it worth their time and effort. My wife might work if someone offered to pay her $80k. But less than that she’d rather stay home and watch the grandkids.
Overall, main street has recovered. Wall Street is in a bit of an overshoot however.
You are either a complete ignoramus, or a troll – or perhaps both.
A full-time 40 hour a week job with benefits is not the same as one or two 20- hour a week $12/hour part-time job(s) with no benefits. There is a vast qualitative difference between today’s employment /unemployment statistics and those of 15-20 years ago.
And furthermore, if your wife is old enough to be grandmother, then she most likely wouldn’t be counted as part of the labor force anyway – and neither would anyone else that would “rather stay home and watch the grandkids”.
I may be an ignoramous, but definitely not a troll.
1. Of course a full-time job is different than 2 20 hour part-time jobs. So what? They had those 15 – 20 year ago also. The economy has changed. More employers are part-time oriented. There are more fast food outlets and fewer assembly lines.
2. My wife is 53. And still pretty hot.
It would be great if The Donald would tell the BLS to put out the real stats, but then again it might be too much of a shock to the economy after so many years of the movers & shakers pretending to believe the fantasy.
It’s one thing to complain and point fingers when you are NOT in the power seat. But now that Trump is in the seat, he will do what every other president has done – look to get the lowest possible unemployment statistics.
Suddenly, Trump is going to be happy that the unemployment figures are under 5%. Mark my words.
The BLS does put out the real stats. Problem is 99% of the population reads the headline and agrees with it. I doubt most of them could understand the BLS tables anyway,
The simple fact is that the BLS is an agency that should be eliminated.
Real numbers are available from the IRS.
I hope Trump gets rid of the BLS.
It is staggering that so much money is expended in getting false information that no one in charge takes any notice of (including the Fed) for the purpose of improving the lot of citizens.
All that to maintain the exclusive rights to charge the public purse (prey on the defenceless) and justify huge priestly privilege.
Surreal ‘newspeak’, good is bad and war is peace.
how many hours of robot work were done? i need to know if the robot who replaced me is holding up their end of things