November Jobs Surge 211K, Higher Than Expected: December Rate Hike Looms Despite Slump In Weekly Earnings

It appears the December rate hike is now cemented following the BLS' report that November jobs rose by 211K, higher than the 200K expected, and well above Janet Yellen's "whisper" number of just 100,000 being sufficient. This follows an even stronger revision to the October number from 271K to a whopping 298K. The unemployment rate remained flat at 5.00%, in line with expectations.

 

While the headline jobs number was good, a less pleasant statistic emerges below the surface where we see that while average hourly earnings rose 0.2% as expected, this was down from last month's revised 0.4%.

 

But an even worse picture emerges when looking at the average weekly earnings, which actually declined to $871.13 from $872.27 last month, which represents just a 2% increase from a year ago, matching the lowest print over the past year. This is the result of weekly hours worked declining from an upward revised 34.6 to 34.5

 

For those curious about the participation rate, it actually posted a small increase from a 38 year low of 62.4% to 62.5% as a result of the people not in the labor force declining from 94.5 to 94.4 million.

 

From the report:

Total nonfarm payroll employment rose by 211,000 in November, about in line with the average monthly gain of 237,000 over the prior 12 months. In November, job growth occurred in construction, professional and technical services, and health care. Employment in mining and information declined over the month. (See table B-1.)

 

Employment in construction rose by 46,000 in November, with much of the increase occurring in residential specialty trade contractors (+26,000). Over the past year, construction employment has grown by 259,000.

 

In November, professional and technical services added 28,000 jobs. Job gains occurred in accounting and bookkeeping services (+11,000), and employment in  computer systems design and related services continued to trend up (+5,000). Over the year, professional and technical services has added 298,000 jobs.

 

Health care employment increased by 24,000 over the month, following a large gain in October (+51,000). In November, hospitals added 13,000 jobs. Health care  employment has grown by 470,000 over the year.

 

Employment in food services and drinking places continued to trend up in November (+32,000) and has risen by 374,000 over the year.

 

Retail trade employment continued to trend up in November (+31,000) and has increased by 284,000 over the year. In November, job gains occurred in general merchandise stores (+12,000) and motor vehicle and parts dealers (+9,000). Over the past 12 months, these industries have added 85,000 jobs and 71,000 jobs, respectively.

 

Employment in mining continued to decline in November (-11,000), with losses concentrated in support activities for mining (-7,000). Since a recent peak in December 2014, employment in mining has declined by 123,000.

 

Information lost 12,000 jobs over the month. Within the industry, employment in motion pictures and sound recording decreased by 13,000 in November but has shown little net change over the year.

 

Employment in other major industries, including manufacturing, wholesale trade, transportation and warehousing, financial activities, and government, changed little over the month.

 

The average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour to 34.5 hours in November. Both the manufacturing workweek and factory  overtime were unchanged in November, at 40.7 hours and 3.2 hours, respectively. The average workweek for production and nonsupervisory employees on private  nonfarm payrolls was also unchanged at 33.7 hours. (See tables B-2 and B-7.)

 

In November, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $25.25, following a 9-cent gain in October. Over the year, average hourly earnings have risen by 2.3 percent. In November, average hourly earnings of private-sector production and nonsupervisory employees, at $21.19, changed little. (See tables B-3 and B-8.)

 

The change in total nonfarm payroll employment for September was revised from  +137,000 to +145,000, and the change from October was revised from +271,000 to +298,000. With these revisions, employment gains in September and October combined were 35,000 more than previously reported. Over the past 3 months, job gains have averaged 218,000 per month.

Here, however, is the punchline: we will have more on this shortly:

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 319,000 to 6.1 million in November, following declines in September and October. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job. Over the past 12 months, the number of persons employed part time for economic reasons is down by 765,000.

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