Friday’s jobs report by the U.S. Bureau of Labor Statistics showed that the U.S. economy created 263,000 jobs in November. The continuing growth in the job sector, however, indicates that inflation is likely to continue and perhaps even worsen. The unemployment rate held steady at 3.7 percent.
This is good news for job seekers or people looking to find a better position than the one they currently have, but employers can expect no relief on the immediate horizon as they attempt to hire staff.
Notable job gains occurred in the leisure and hospitality (+88,000 jobs), health care (+45,000 jobs), and government sectors (+42,000 jobs) – mostly in local government. Employment declined in retail trade and transportation (-32,000 jobs), with general merchandise, appliance, and furniture stores, and warehousing (-15,000 jobs) losing the most workers.
The unemployment of 3.7 percent in November maintains the narrow range of 3.5 percent to 3.7 percent seen since March. The number of unemployed persons was essentially unchanged at 6.0 million in November.
The unemployment rate for adult men was just 3.4 percent, adult women at 3.3 percent, and teenagers at 11.3 percent. White unemployment was just 3.2 percent, Blacks 5.7 percent, Asians 2.7 percent, and Hispanics 3.9 percent. This showed little or no change from last month.
Among the unemployed, permanent job losers rose by 127,000 to 1.4 million in November. The number of persons on temporary layoff changed little to 803,000. The number of long-term unemployed (those jobless for 27 weeks or more) showed little change at 1.2 million in November. The long-term unemployed accounted for 20.6 percent of all unemployed persons.
The U.S. labor force participation rate was 62.1 percent, while the employment-population ratio was at 59.9 percent, little changed in November and has shown little net change since early this year. These measures are each 1.3 percentage points below their values in February 2020, before the COVID-19 pandemic.
The number of people not in the labor force who say they currently want a job was little changed at 5.6 million in November and remained above its February 2020 level of 5.0 million. These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job.
Monthly job growth has averaged 392,000 thus far in 2022, compared with 562,000 per month in 2021.
In November, average hourly earnings for all employees on private nonfarm payrolls rose by 18 cents, or 0.6 percent, to $32.82. Over the past 12 months, average hourly earnings have increased by 5.1 percent.
In November, the average workweek for all employees on private nonfarm payrolls declined by 0.1 to 34.4 hours. In manufacturing, the average workweek for all employees decreased by .2 hour to 40.2 hours, and overtime declined by 0.1 hour to 3.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.9 hours.
The total labor force is still 3.5 million smaller than pre-pandemic and does not appear to be making progress toward returning to that level.
The jobs report comes days after Federal Reserve Chief Jerome Powell signaled the central bank would like to reduce its interest rate hikes even though inflation remained below the Fed’s target of 2 percent.
Powell said that the Fed would like to reduce the number of open jobs and employers’ need for new workers—two key forces behind fast wage growth.
“To be clear, strong wage growth is a good thing,” Powell said in remarks at The Brookings Institution. “But for wage growth to be sustainable, it needs to be consistent with 2 percent inflation.”
In its eighth and final meeting of 2022, the Federal Reserve is expected to raise interest rates by another 50 basis points, or 0.5 percentage point, Powell implied Wednesday. The previous four Fed rate hikes were for 75 basis points or 0.75 percentage points.
“It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” Powell said. “Time for moderating the pace of rate increases may come as soon as the December meeting.”
A 50-basis point hike would lift short-term rates to a target range of 4.25 to 4.50%.
“The ultimate level of rates will need to be somewhat higher than thought at the time of the September meeting in the summary of economic projections,” Powell added.
It is usually another week before the Labor Department releases state unemployment data. The state of Alabama’s unemployment rate was 2.7 percent in October.
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