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Friday, December 08, 2023

Comments on November Employment Report

by Calculated Risk on 12/08/2023 09:27:00 AM

The headline jobs number in the November employment report was at expectations, however employment for the previous two months was revised down by 35,000, combined.  The participation rate and the employment population ratio both increased, and the unemployment rate decreased to 3.7%.

Leisure and hospitality gained 40 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 158 thousand jobs since February 2020.  So, leisure and hospitality has now added back about 98% all of the jobs lost in March and April 2020. 

Construction employment increased 2 thousand and is now 425 thousand above the pre-pandemic level. 

Manufacturing employment increased 28 thousand jobs and is now 200 thousand above the pre-pandemic level.

In October, the year-over-year employment change was 2.79 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.

Seasonal Retail HiringThis 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 264 thousand workers Not Seasonally Adjusted (NSA) net in November.  This was about the same as last year and suggests similar real retail sales this holiday season as last year.

This was seasonally adjusted (SA) to a loss of 38 thousand jobs in November.

Prime (25 to 54 Years Old) Participation

Employment Population Ratio, 25 to 54Since 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 was unchanged in November at 83.3% from 83.3% in October, and the 25 to 54 employment population ratio declined to 80.7% from 80.6% the previous month.

Both are close to the pre-pandemic levels.

Average Hourly Wages

WagesThe graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.0% YoY in November.   

Since wages increased sharply last December, it is likely YoY wage growth will slow further next month.

Part Time for Economic Reasons

Part Time WorkersFrom the BLS report:
"The number of persons employed part time for economic reasons decreased by 295,000 to 4.0 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 decreased in November to 3.99 million from 4.28 million in October. This is below pre-recession levels.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 7.0% from 7.2% in the previous month. This is down from the record high in April 2020 of 22.9% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is at the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

Unemployed Over 26 WeeksThis graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.150 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.282 million the previous month.

This is at pre-pandemic levels.

Job Streak

Through November 2023, the employment report indicated positive job growth for 35 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).

Headline Jobs, Top 10 Streaks
Year EndedStreak, Months
6 tie194333
6 tie198633
6 tie200033
1Currrent Streak


The headline monthly jobs number was at consensus expectations; however, employment for the previous two months was revised down by 35,000, combined.  The participation rate and the employment population ratio both increased, and the unemployment rate decreased to 3.7%.

Another solid employment report.