Job Growth Continues & the Unemployment Rate Drops Further

Job growth continues but at a slower pace in November, and the unemployment rate drops slightly to 6.7%. Read below for the details. 

JOB GROWTH: This month’s jobs report reflected a slower pace of job creation, from a revised 610,000 in October to less than half that at 245,000 new jobs in November. Revisions of the previous two months’ figures netted an additional 11,000 new jobs over the period. 

TOP INDUSTRIES: As we move deeply into the holiday season, notable increases were reported in transportation and warehousing (reflecting the uptick in online shopping), as well as professional and business services and healthcare. However, the usual spike in retail jobs was absent this year. 

UNEMPLOYMENT: As is the case with job creation, the month-over-month change in the unemployment rate has also slowed, moving from 6.9% last month (a full percentage point lower than the prior month) to 6.7% in November. Analysts attribute this not to higher employment but to workforce shrinkage, i.e., approximately 400,000 people, primarily women and Baby Boomers, have exited the labor pool.

PANDEMIC SUPPLEMENT: To help gauge the impact of coronavirus on the labor market, BLS has been tracking additional trends each month. In November, more people worked remotely than in October (21.8% vs. 21.2%). This uptick may reflect renewed coronavirus fears. It is in line with the latest spike in cases, possibly brought on by colder temperatures, which have driven people indoors and into closer quarters.

WAGES: Wages continued to rise in November, with a nine-cent uptick in average hourly earnings.  

WORK WEEK: The average work week showed no movement, continuing at 34.8 hours.

TEMPORARY JOB TRENDS: We continue to see substantial variability in temporary employment trends. Over the past three-month period, jobs creation in this sector shifted from 24,800 in September to 123,000 in October to just 32,200 in November.

WHAT DOES IT ALL MEAN? Job market activity slowed in November but continued to move in the right direction. With the promise of vaccines and therapeutics on the horizon and phenomenal third quarter growth in GDP, we should be optimistic about recovery. We may see an increase in consumer confidence and spending on consumer goods in the coming months that will continue to fuel the growth in jobs in the warehousing and customer service industries.

Sources: U.S. Bureau of Labor Statistics (BLS), Steinberg Employment Research, CNN, Staffing Industry Analysts, American Staffing Association, CNBC, The Washington Post