Comments on November Employment Report

The headline jobs number in the November employment report was above expectations, however employment for the previous two months was revised down by 23,000, combined.   The participation rate decreased, and the unemployment rate was unchanged at 3.7%.  

Leisure and hospitality gained 88 thousand jobs in November.  At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 980 thousand jobs since February 2020.  So, leisure and hospitality has now added back about 88% all of the jobs lost in March and April 2020. 

Construction employment increased 20 thousand and is now 126 thousand above the pre-pandemic level. 

Manufacturing added 14 thousand jobs and is now 149 thousand above the pre-pandemic level.

Earlier: November Employment Report: 263 thousand Jobs, 3.7% Unemployment Rate

In November, the year-over-year employment change was 4.90 million jobs.

Seasonal Retail Hiring

Typically, retail companies start hiring for the holiday season in October, and really increase hiring in November. Here is a graph that shows the historical net retail jobs added for October, November and December by year.

This graph really shows the collapse in retail hiring in 2008. Since then, seasonal hiring had increased back close to more normal levels. Note: I expect the long-term trend will be down with more and more internet holiday shopping.

Retailers hired 257 thousand workers Not Seasonally Adjusted (NSA) net in November.  

This was seasonally adjusted (SA) to a loss of 29.9 thousand jobs in November.

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 participation rate decreased in November to 82.4% from 82.5% in October, and the 25 to 54 employment population ratio decreased to 79.7% from 79.8% the previous month.

Both have declined recently - but both are close to the pre-pandemic levels and indicate almost all of the prime age workers have returned to the labor force.

Part Time for Economic Reasons

From the BLS report:

"The number of persons employed part time for economic reasons was about unchanged at 3.7 million in November. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons increased in November to 3.685 million from 3.660 million in October. This is below pre-recession levels and near the fewest part time workers (for economic reasons) in over 20 years.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 6.7% from 6.8% in the previous month. This is down from the record high in April 22.9% and ties the lowest level on record (series started in 1994). This measure is below the level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.230 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.165 million the previous month.

This is close to pre-pandemic levels.

Summary:

The headline monthly jobs number was above expectations; however, employment for the previous two months was revised down by 23,000, combined.  

The headline unemployment rate was unchanged at 3.7%, and U-6 declined to tie a record low at 6.7%.

Overall, this was another solid employment report.