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Patrick J. O’Keefe Reacts to November Jobs Report


12/2/2016
 
U.S. Employment – November 2016:  A Slow Parade Continues
 
Since its March 2010 start, the U.S. jobs recovery has been a slow-moving parade that has left millions of potential participants in the shadows.  
 
Progress has been made, but its pace has been – and continues to be – slow.
 
Employment: The jobs count rose in November for the 74th consecutive month, reaching a record 145.1 million jobs in November.  The month-on-month increase (178,000 jobs) was solid, but well below the prior 12 months' average (196,300).
 
Private sector employers contributed almost nine-tenths (87.6%) of the monthly increment.  Professional/business services, leisure/hospitality and healthcare accounted for two-thirds of the month-on-month gain.  
 
Year-to-date through November, U.S. payrolls grew by almost 2.0 million jobs.  That was about one-fifth (-19.9%) fewer than in 2015's first eleven months, which trailed 2014's gain by almost one-tenth (-9.2%).  The deceleration has been concentrated in the private sector.  
 
Average hourly earnings for private nonfarm employees declined by 3 cents in November, the first drop in 2016.  Year-on-year, the hourly average increased by 62 cents (2.5%).
 
Labor force participation declined in November by 219,000 individuals, as a drop in the number of jobseekers, down 226,000, was partially offset by an added 160,000 jobholders.  
 
The net effect was that the labor force participation rate (LFPR) slipped for the second consecutive month.  
 
At 62.7 percent, the LFPR is only modestly above where it stood in June 2015 (lowest since mid-1977) and significantly below where it stood at the start of the recession (66.2% in January 2008).
 
November's unemployment rate (4.6%) was the lowest of any month since mid-2007.  Had it not been for the ensuing decline in labor force participation, November's unemployment rate would have exceeded 9.0%.  
 
Other measures of labor force conditions were generally positive.  
 
The number of long-term unemployed (those whose job search spanned 27 weeks or longer) was the lowest in more than eight years (since August 2008).
 
Underemployment (those working fewer than 35 hours) affected the fewest number of workers (5.6 million) and the smallest share of all jobholders (3.7%) since mid-2008.  In March 2010, 6.6% of all workers were underemployed.
 
The number of discouraged jobseekers (i.e., those who want work but have not actively sought it) is down substantially from its December 2010 peak (1.3 million) but has been relatively stable – at about one-half million – over the past year.  

 

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