November 2015 Employment Report

Click image for larger view

According to the Bureau of Labor Statistics’ (BLS) establishment survey, non-farm payroll employment rose by 211,000 jobs in November -- besting consensus expectations of 190,000. Moreover, combined September and October employment gains were revised up by 35,000 (September: +8,000; October: +27,000). Meanwhile, the unemployment rate (based upon the BLS’s household survey) remained unchanged at 5.0% as the change in the number of people employed (+244,000) nearly matched the increase in the civilian labor force (+273,000). 

Click image for larger view

Observations from the employment reports include:

* The disparity in job gains between the establishment (+211,000) and household (+244,000) surveys was negligible.

* Workers aged 45-54 accounted for the majority (+221,000) of “gross” jobs gained. By contrast, workers aged 16-24 actually declined by 109,000; note that age-cohort-based estimates are not additive, as each cohort is assigned a different seasonal adjustment.

* Manufacturing employment edged lower in November. Year-to-date, manufacturing has gained a net 17,000 jobs; during August and September, however, manufacturing surrendered 27,000 of the 44,000 jobs gained earlier in 2015. Wood Products added 2,400 jobs in November; Paper and Paper Products gained 100.

* Construction added 46,000 jobs, while oil and gas extraction shed 2,400 jobs.

* Over 63% (136,700 jobs) of November’s private-sector job growth occurred in the sectors typically associated with the lowest-paid jobs -- Retail Trade: +30,700; Professional & Business Services: +27,000; Education & Health Services: +40,000; and Leisure & Hospitality: +39,000. This is a persistent issue, as we have repeatedly highlighted: There are 1.428 million fewer manufacturing jobs today than at the start of the Great Recession in December 2007, but 1.564 million more Food Services & Drinking Places (i.e., wait staff and bartender) jobs. 

Click image for larger view

* The employment-population ratio remained at 59.3%; roughly speaking, for every five people added to the population, fewer than three are employed. Meanwhile, the number of employment-age persons not in the labor force retreated by 67,000 to just over 94.4 million. 

Click image for larger view

* The labor force participation rate (LFPR) inched up to 62.5%, comparable to October 1977. Average hourly earnings of all private employees rose by $0.04 (to $25.25), resulting in a 2.3% year-over-year increase. For all production and nonsupervisory employees (pictured above), hourly wages also rose by $0.01, to $21.19 (+2.0% YoY). With the CPI running at an official rate of +0.2% YoY, wages are technically rising in real (inflation-adjusted) terms. The average workweek for all employees on private nonfarm payrolls shrank by 0.1 hour, to 34.5 hours. 

Click image for larger view

* Finally, full-time jobs increased by 3,000 while part-time jobs rose by 137,000. Full-time jobs have been trending higher since December 2009, and are now 152,000 above the pre-recession high (even while the non-institutional, working-age civilian population has risen by an estimated 18.6 million). Part-time jobs, by contrast, have been stuck in a channel between roughly 27 and 28 million.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.