U.S. Jobs: November Numbers Bring Welcome News
I ended last month's review of the October jobs report with this sentence: "Stay tuned and we'll see if the roller coaster starts moving on the vertical axis next month!" Indeed, the roller coaster is on its way up with numbers and trends not yet seen in 2019. Unless it all comes crashing down in January, after the December numbers are released, in fact, it looks like 2019 is ending on a high note.
To begin with, jobs created for November came in at 266,000, and numbers for September (+13,000) and October (+28,000) were both revised upward. We haven't seen a monthly total of more than 219,000 since January (which came in at a relatively eye-popping 312,000 new jobs).
But 266,000 jobs added for November is not at all bad, especially since the prevailing consensus forecast from labor economists was in the 180,00-to-190,000 range before the U.S. Bureau of Labor Statistics released its report. It's always nice when things turn out better than expected, And, as you'd expect, all the major market indices are up as I write this post.
Unemployment Dips Again, and Wages Increase
November's official unemployment rate dropped by a tenth of a percentage from 3.6 to 3.5, once again matching levels not seen since 1969 (50 years ago). Wages continue to climb (though slowly, especially given our historic low unemployment numbers) with an increase of $0.07 per hour to $28.29 for all employees on private nonfarm payrolls.
In the past 12-month period (December 2018 through November 2019) wages are up by 3.1 percent. Given that the latest inflation rate (October 2019) is 1.8 percent, that means the average pay packet supports a slight increase in spendable income of 1.3 percent. It's not exactly a bonanza, but it is a positive difference, and trending ever so slightly upward.
Information Sector, Please!
A quick gander at the information sector shows very, very low unemployment in November 2019: 1.6 percent, as reported in table A-14. I can't remember seeing a level this low ever before. This translates into a total of 39,000 jobs, which produces a sector size of 2.44 million.
In November 2018, the information sector unemployment rate was 3.8 percent, against 95,000 jobs, for a sector size of 2.5 million. This would indicate 60,000 jobs lost to the sector over the past year, along with a nearly unbelievable unemployment rate.
CompTIA sees things somewhat differently, and reports 13,500 jobs added in its take on IT employment for November (which includes 5.2 million jobs in IT occupation employment for people working in IT jobs outside the IT sector itself, and nearly 4.6 million jobs in IT Sector employment, for a total of 9.8 million IT-related jobs for the whole U.S. economy).
In CompTIA's view, IT employment is trending upward (its title for the November jobs press release is "U.S. Tech Sector Hiring Pace Quickened in November") with the majority of opportunities under the heading of software development, with additional gains expected in cybersecurity, data analysis, and technology infrastructure.
Where Job Growth Is Happening
The most unusual spike in November jobs occurred in manufacturing, which jumped by 54,000 for the month. As already hinted at, 41,000 of those jobs represent the return of striking GM workers to the factory floor, but there's another 13,000 worth of new jobs in that mix as well. The 41,000 bump offsets the 41,000 dip that occurred the month before when the GM strike began.
Healthcare continues its relentless job growth, with 45,000 jobs added for November, against a trailing 12-month average monthly growth of 34,500 jobs (more than 10,000 over that mean value, about 23 percent higher).
Professional and technical services were up by 31,000 jobs, against a 23,000 trailing 12-month average (more than 8,000 over that mean, or about 25 percent higher). Leisure and hospitality are also up by 45,000 jobs, against a trailing four-month average monthly growth of nearly 55,000 jobs (down by 19 percent against that short-term mean).
It's nice when recent growth rates show an additional kick beyond the trailing averages, because that usually indicates that growth is accelerating. Other buoyant sectors include transportation and warehousing, up by 16,000 jobs for November. Financial services added 13,000 jobs for the month, against a trailing 12-month average of 9,600 jobs (about 3,000 over that mean value, or 30 percent higher).
All other sectors were flat — namely, construction, wholesale trade, information, and government. Mining was the only loser, down by 7,000 jobs for November, and by 19,000 jobs total since this sector hit its most recent peak in May 2019.
The Pleasing Power of Positivity
As the Washington Post puts things, in reference to the December 6 jobs report: "The labor market has remained one of the brightest spots in the economy, and combined with a high stock market has contributed to high levels of consumer spending and a relatively rosy consumer sentiment."
All in all, pleasant surprises like those delivered for November are always welcome, particularly given U.S. political turmoil, trade wars, and actual conflicts in numerous spots around the globe. I remain hopeful that the roller coaster is still climbing its lift hill, and will continue to do so for some time yet to come.
As ever, please stay tuned for next month's thrilling installment after New Year's Day, 2020.