It’s the Holiday (hiring) Season
The U.S. economy added 211,000 jobs in November. This was down from a prior revised 298,000 (up from 271,000), but lower than the Bond Squad forecast of 225,000, but above the Street consensus of 200,000. The private sector added 197,000 jobs, down from an upwardly revised 304,000 (up from 268,000), but above the Street consensus estimate of 190,000. The Unemployment Rate held steady at 5.0%. Average Weekly Hours declined to 34.5 from a prior revised 34.6 (up from 34.5). Average Hourly Earnings grew 0.2% MoM, half of October’s 0.4% monthly gain. Annually, wages grew 2.3%, down from a prior 2.5%. The U-6 Underemployment Rate rose to 9.9% from a prior 9.8%. The U-6 rate captures those who are underemployed (working part-time, but seeking full-time), unemployed workers and discouraged workers.
I would describe this data as “good.” I am not trying to kill the buzz. Why am I focusing on year-over-year comparisons of October/November payrolls data? Because it is in these two months which most holiday hiring occurs. In spite of seasonality formulas, the October/November period tends to be among the stronger periods for job additions. Thus, it is more honest to compare October/November 2015 with the same period from previous years. When we compare the October/November jobs data to the same period during the past two years, it does not indicate that the pace of hiring has picked up.
Something else which we must consider when analyzing today’s data is that construction hiring was unusually strong for this time of year, particularly in the post financial crisis environment. In the October/November 2014 period, the construction sector added a seasonally-adjusted total of 40,000 jobs. In the same period 2015, the construction sector added 77,000 jobs. The retailing sector also saw a downshift in jobs, year-over-year. The 2014 October/November total for retail sector hiring was 92,000 jobs. The total for the same period this year is 70,000 jobs.