U.S. Payroll Employment Bounces Back in November After Storms & Strike; Earnings Growth Steadies & Jobless Rate Edges Up

Nonfarm payrolls increased 227,000 (1.4% y/y) in November after rising 36,000 in October, revised from 12,000, and 255,000 in September, revised from 223,000. Expectations had been for a 215,000 rise in the Action Economics Forecast Survey. The improvement pulled the three-month average change to 173,000 from 123,000 in October, though that remained below the recent high of 267,000 in March of this year.

Average hourly earnings increased 0.4% last month following an unrevised 0.4% October gain and a 0.3% September rise. Earnings growth of 4.0% y/y remained up from 3.6% in July, but remained below the 5.9% high in March 2022. A 0.3% November increase had been expected.

The unemployment rate, measured in the household survey, rose to an expected 4.2% in November from 4.1% in both October & September. It reached a low of 3.4% in April of 2023. Household employment fell 355,000 after declining 368,000 in October. The labor force declined 193,000 after a 220,000 October weakening. The overall unemployment rate, including workers who were marginally attached & working part-time for economic reasons, rose to 7.8% from 7.7%.

In the payroll survey, private-sector employment rose 194,000 in November (1.3% y/y) following a 2,000 decline in October, revised from -28,000. Construction sector employment increased 10,000 (2.5% y/y) last month after rising 2,000 in October. Factory sector payrolls gained 22,000 (-0.5% y/y) after falling 48,000 in October.

Private service-producing employment improved 160,000 (1.4% y/y) after increasing 42,000 in October, revised from 9,000. Increases varied greatly amongst service sector categories. Private education & health service jobs rose 79,000 (3.7% y/y) and leisure & hospitality employment gained 53,000 (1.6% y/y). Professional & business service jobs rose 26,000 (0.3% y/y). Within that category, the number of temporary jobs increased 1,600 (-5.2% y/y). Financial activities jobs rose 17,000 (0.6% y/y). Information sector employment held steady last month (-0.5% y/y) while trade, transportation & utilities employment fell 23,000 (+0.6% y/y).

Government sector payrolls increased 33,000 in November (2.1% y/y) after rising 38,000 in October. Local government jobs improved 15,000 last month (2.0% y/y) while state government employment rose 20,000 (2.8% y/y). The number of federal government jobs fell 2,000 (+1.5% y/y).

The 0.4% November rise in private-sector average hourly earnings reflected a 0.1% gain (4.3% y/y) in the goods-producing sector. Earnings in construction improved 0.1% last month (4.1% y/y) while factory sector earnings also rose 0.1% (4.3% y/y). In the services sector, earnings rose 0.4% in November (4.0% y/y) while trade, transportation and utilities pay jumped 0.6% (3.5% y/y). Information sector earnings increased 0.4% (4.8% y/y) as professional & business service-sector earnings increased 0.6% (5.2% y/y). Leisure & hospitality earnings rose 0.4% (3.9% y/y). Financial sector earnings increased 0.4% (4.2% y/y). Private education & health services earnings increased 0.2% (3.3% y/y).

The length of the average workweek in the private sector edged up to 34.3 hours last month from 34.2 hours in October. The workweek in the goods-producing sector held October’s 39.7 hours, compared to 39.8 hours in the previous two months. The construction sector average workweek fell to 38.9 hours from 39.1 hours. The factory sector workweek edged up to 40.0 hours while average weekly overtime hours edged up to 2.9. The average workweek in the private service sector was steady at 33.2 hours. The aggregate weekly hours index in the private sector, a key indicator of production and income, increased 0.4% last month (1.0% y/y) after a 0.3% October decline.

In the household survey, the higher 4.2% jobless rate occurred as employment fell 0.2% and the size of the labor force eased 0.1%. The labor force participation rate dropped to 62.5% in November, down from the high of 62.8% twelve months earlier. The rate for teenagers increased to 36.2%, but was below the 38.2% high in March, while for individuals aged 20-24 the rate eased to 71.5%. The participation rate for workers aged 25-54 held at 83.5%, down from a high of 84.0% in July, but for workers 55 and over it fell to 38.4 hours after three months at 38.6 hours.

The employment/population ratio for all workers eased to 59.8% in November from 60.0% in October. It remained below its high of 61.1% in February 2020, just prior to the pandemic. Growth in the population has been steady at 0.6% y/y all this year, but below the 1.2% y/y high this past December.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's USECON database. Detailed figures are in the EMPL and LABOR databases. The expectations figures are in the AS1REPNA database.