US Economy Adds 203,000 Jobs in November as Unemployment Falls to 7.0 Percent
The Bureau of Labor Statistics reported today that the U.S. economy added 203,000 new payroll jobs in November, easily beating analysts’ expectations. The job gains were spread widely across the economy, with construction and manufacturing both showing significant increases along with job growth in transportation, retailing and health care. Federal government employment decreased by 7,000, continuing a long decline, but that was more than offset by gains in government jobs at the state and local levels.
Because the government shutdown had distorted October’s data, observers paid special attention to the revisions in today’s jobs report. Some had feared that today’s report would revise last month’s unexpectedly strong increase of 204,000 payroll jobs sharply downward. As it happened, the initial October estimate moved downward only slightly, to 200,000. At the same time, the BLS revised September’s job gains upward to 175,000 from the 163,000 previously reported. The following chart shows both revised and first-reported payroll job increases.
The BLS also reported that the unemployment rate fell to 7.0 percent in November, a new low for the recovery. The unemployment rate is based on a survey of households that is separate from the survey of employers that is used to compile changes in payroll jobs. The household survey showed that the number of employed workers increased by 818,000 during the month. The increase in the number of employed workers often differs from the number of new payroll jobs, in part because the household survey includes self-employed and farm workers, and in part because of differences in survey methodology. Adding to the good news, the latest report showed increases in both the labor force participation rate and the employment-population ratio.
In addition to the standard unemployment rate, the BLS also provides a broader measure of labor market distress known as U-6. The broad measure includes involuntary part-time workers and discouraged workers, who are not counted as unemployed because they have given up hope of finding a job. U-6 fell to 13.2 percent in October. As the next chart shows, that figure, too, marked a new low for the recovery.
You have to look hard in today’s report to find any bad news, although you can do so if you try. One of the few unfavorable developments in the employment situation for November was an increase in the percentage of unemployed workers who were out of a job for more than 26 weeks. As the next chart shows, although long-term unemployment has been trending downward, it remains stubbornly high by historical standards even as other employment indicators have improved. The mean and median duration of unemployment also increased.
All in all, today’s strong job data, together with yesterday’s revision of GDP growth upward to 3.6 percent, show that the United States continues to be one of the better performers among developed economies. The U.S. economy is still operating below potential and unemployment remains elevated by historical standards, but at least things seem to be moving in the right direction.
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