Something remains very broken with the US labor market: while the unemployment rate just dropped to the lowest since August 2007, wage growth dropped as well and on a year over year basis, rose just 2.5%, far below the 3.8% it was when the unemployment rate last hit 4.7%. This continues to vex economists who have vowed that if only one lowers the unemployment rate far enough, all the slack in the labor market will be soaked up. Alas, that is not happening, for several reasons, the chief of which is that the quality of jobs added remains subpar, with wage growth – especially for less than “supervisory” and management positions – declining. Furthermore, as noted earlier, both part-time jobs and multiple jobholders have been surging in recent months, ostensibly as a result of Obamacare pressures.
Still, according to the BLS at least, some 178,000 seasonally adjusted jobs were added in November, arbitrarily goalseeked as they may have been. Where were they? Here is the answer:
- The most actively hiring sector was “Professional and business services” where employment rose by 63,000 in November, with accounting and bookkeeping services adding 18,000 jobs. Employment continued to trend up in administrative and support services, (+36,000), computer systems design and related services (+5,000), and management and technical consulting services (+4,000).
- Health care employment rose by 28,000 in November. Within the industry, employment growth occurred in ambulatory health care services, i.e. nurses (+22,000).
- As expected, the “Waiter and bartender” recovery continued, with 18,900 “food service and drinking places” jobs added.
- Employment in construction continued on its recent upward trend in November (+19,000), with a gain in residential specialty trade contractors (+15,000). Over the past 3 months, construction has added 59,000 jobs, largely in residential construction. What is odd is that typically these jobs are among the higher paying jobs, and yet the average hourly wage declined so this number seems out of place.
- On the other end, manufacturing jobs declined again, dropping by 4,000 in November, following a 5,000 decline in October.
- Also troubling, was the big drop in high-paying information jobs, which declined by 10,000, after another decline in October.
- Surprisingly, retail trade also dropped by over 8,000, having declined in October, and suggesting that the “low hanging fruit” jobs are on their way out.
- In what may be a good or bad sign, temp help jobs rose by 14,300, which can be seen as either positive – a precursor to more hiring – or negative as employers would rather hire part-time workers over full time.
- Finally, government workers rounded off the month, by adding 22,000 workers in November, a jump from October’s 7,000. With Trump as president, this trend will likely not continue.
The visual summary is below:
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