Unemployment rate decline not as good as it sounds
Employment was up 120,000 last month and the unemployment rate dropped significantly, to 8.6% in November down from 9% in October.聽 Job growth in October and September was revised up by 72,000.
While the employment story has improved over the past few months, the decline in the November unemployment rate isn鈥檛 as good as it sounds.聽 People who drop out of the labor force, like those who give up looking for work, are not counted in the jobless rate, and about half of the 0.4 percentage point decline was due to this factor.聽 In fact, about 190,000 of the unemployed left the labor force last month.
Once again, the private sector added jobs鈥�140,000 last month鈥攁nd the public sector cut them (down 20,000).
The report is consistent with slightly better economic performance over the past few months.聽 It鈥檚 always useful to average over a few months to work out some of the monthly noise in the data and over the past three months, employment is up by an average of about 140,000 per month, compared to 84,000 over the prior three months.
But there鈥檚 still a great deal of slack in the job market.聽 Average weekly hours worked didn鈥檛 budget and hourly wages ticked down slightly鈥攐ver the past year, hourly earnings, before inflation, are up 1.8%, well behind inflation.
In other words, we鈥檙e a long way away from providing job seekers and workers with the job and wage increases they need to get ahead. 聽Outside of the public sector, we鈥檙e at least moving in the right direction, but very slowly.
Details to follow, including a link to Chad鈥檚 analysis when it鈥檚 ready.
