Economic Forecasts

November Jobs Report: Growing not Slowing

The Jobs Data was Better than the Jobs Report

The monthly Jobs Report is often a “market mover.” What is happening with the seasonally adjusted “jobs” number? What is happening with wages? What is happening with unemployment? What is happening with participation? The problem that most people have is that sometimes the data doesn’t make sense. If the media report on a huge surge in seasonally adjusted full-time jobs why did the number of seasonally adjusted(SA)  non-farm payroll (NFP) numbers “disappoint?” This column attempts to manage expectations through analyzing the non-seasonally adjusted (NSA) data, and the seasonally adjusted data, and project the possibilities. The article “November Jobs Report Forecast: More Growth” examined the SA and NSA Current Population Survey (CPS) jobs and unemployment data, as well as the SA and NSA Current Employment Statistics worker data. It found that:

  • Annual Growth should exceed 1.94%, adding 250,000 to 350,000 SA CES privates sector workers
  • Month to month growth projected growth of 220,000 to 320,000 SA CES private sector workers
  • The Current Year data, January through October, projected a value of 234,000 private sector workers added this month
  • There could be huge upward revisions to the data from September and October. An increase of 30,000 workers to October would “borrow” 30,000 from November, reducing a value of 229,000 to 199,000.
  • Non-seasonally adjusted all sectors should have added workers except Leisure and Hospitality (LAH,) and Other Services (OS.)
  • Non-seasonally adjusted all sectors should have added workers November to November except Information Technology (IT.)
  • Seasonally adjusted, month to month and November to November, all sectors except IT should add workers.
  • Unemployment should record and report a drop in the number of people unemployed. The caveat was that we saw spikes upward during November of 2014 and November 2016. Were these political workers? This year was an election year.
  • Multiple workers could have , and should have, risen during November. We often see the peak number of multiple job workers during either October or November or December. Women work more dual part-time jobs (PT PT) then men and men work more dual full-time jobs (FT FT) than women. The surge in part-time jobs could mean a spike in women working dual part-time jobs.
  • The Participation Rate, non-seasonally adjusted, could drop from October to November and still rise November to November.

This is a good starting point for this article. There were also comments regarding how job openings and unemployment cannot be directly compared, as well as the “Teen Unemployment Urban Legend” that was propagated earlier this year. What was recorded and what was reported in the November Employment Situation Report?

We had one of our best Novembers Ever for Non-Seasonally adjusted Private Sector Worker Growth. We added 360,000 Non-Seasonally Adjusted (NSA) CES private sector workers. This was the fourth best November that we have had.

  • November 2017 … 454,000
  • November 2005 … 406,000
  • November 2013 … 403,000

We are also on track for one of our best Private sector worker growth years. So far, this year, we have added 2.475 million Private sector workers,

  • November 2016 … 2.099M
  • November 2017 … 2.339M
  • November 2005 … 2.472M
  • November 2015 … 2.490M
  • November 2013 … 2.510M
  • November 1998 … 2.529M

We grew at a monthly rate of 0.28% and an annual rate of 1.90%. The 0.28% rate was a Goldilocks number, not fast, not slow. The 1.90% rate was within expectations. The October NSA CES was revised up by 18,000 while the SA CES was only revised higher by 1,000 workers. The thing that was interesting is that the NSA CES last month was exactly 128.000 million. This indicates that this number will be revised again next month. The seasonal factor was 0.993417. This was a Goldilocks rate. If we used the 2017 seasonal factor then we would have had a value of 140,000 SA CES workers reported instead of 161,000. If we used the 2016 seasonal factor that number would have been reported at 235,000.  The Net Net is that the NSA CES worker data is growing faster than it was during both 2016 and 2017, even though they both received boosts to thier data when the January Jobs Report was released.  The projection of 234,000 was pretty solid.

We Added More Part-time Jobs, and lost Full-time Jobs. We lost 163,000 full-time jobs and added 226,000 part-time jobs. We had seen net job losses during November 2014 and November 2016. It was thought that these could be election related job changes. This year we had a net addition of 63,000 jobs, NSA CPS.  We also saw a drop in NSA and SA U-3 Unemployment. We saw a drop of 121,000 NSA U-3 and a drop of 100,000 SA U-3. This number most likely will not be revised.

Participation improved from last November, as did the Unemployment Rate. The Participation rate improved from 62.69% to 62.88% while the unemployment rate fell from 3.92% to 3.47% SA. This is not as good as it sounds. It is good. It just isn’t as good as it was during November of 1999 when the participation rate was 67.04% while the unemployment rate was 3.85%. Even though the unemployment rate was lower this year than November of 1999 the difference between the two participation rates mean that we are missing 11 million participants. The unofficial U-7 unemployment rate would be 10.15%. The U-7 during November 2008 was 8.15%. The U-7 during November 2010 was 12.89%.

The multiple jobs worker data dropped a bit to 7.934 million. We saw 2.417 million men work a primary FT job and a secondary PT job, compared to women who worked 2.099M FT PT jobs. Men worked 689,000 PT PT jobs. Women worked 1.392M PT PT jobs. There were  192,000 FT FT male workers and 95,000 female FT FT workers.

There are more details yet to come. Sector data. Wage data. The Jobs and Unemployment data by age group. There is also a comparison of President Trump with former Presidents Reagan, Clinton, George W. Bush, and Obama. We have more jobs now then any prior November. We were not able to say that for many years.  We have 5.5 million more full-time jobs now than we had during November 2016. We are not slowing down. We are not heading into a recession. We are still growing.

It’s the Economy.

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