U.S. November Jobs Report is still a mixed bag with unexpected wage decrease

Employment and Unemployment

The much anticipated November Jobs Report, was released on Friday, from the Bureau of Labor Statistics, the last before the Federal Reserve Open Market committee meets, in two weeks, gave a stronger showing in jobs gained, 178,000, slightly higher than predicted,  but labor force participation remained at a steadfast 62.7 percent ,little changed from prior months.. The decrease in wages, from an October high, weakened the overall report, and gave mixed results..

Wages decreased by 3 cents after the much needed bump to 11 cents in October, thus showing that employers, while increasing their hire rate, are reluctant to increase salaries, this contributing to an uneven growth of the economy. Still, some others say that this number, 2.5 percent higher than last year, gives solace.

The lowered labor force participation comes, in part from retiring baby boomers, but figures also show that there is significantly less participation from those in their prime earning years, from 25 to 45 years of age, with some economists seeing this as still a depressed economy.

Gus Faucher, chief economist at PNC in Pittsburgh noted this is “a solid report but not quite as good as the headline numbers would indicate.” However, there was pleasure in many quarters for the 4.6 unemployment rate, the lowest since 2007, yet the story behind the numbers is not as rosy, because that number also does not reflect the number of people stuck in part-time jobs, who’d like to work full-time, nor does it reflect the decrease in the labor force participation rate.

More optimistic observers see that the average wage growth, even though inconsistent, at 2.5 percent, give rise to some joy, especially those in the outgoing Obama administration, who can feel confident, that after 81 consecutive month of private sector growth, they are handing a strong economy to President-elect Donald Trump.

Others less sanguine feel that the mixed results show that the economy to gain its pre recession levels has a long way to go. And, with the Fed's anticipated rate increase this makes many economy hawks cheerful. Add to that increasing house prices, and a growing consumer confidence, many see that the this 3rd quarter growth is a true sign that the economy is on its way to recovery, spurring the Fed to increase interest rates.

There are also others that don’t share this belief.  “There’s no reason to pre-emptively slow the economy down, given that we’re starting from less than full employment,” said Elise Gould, an economist at the left-leaning Economic Policy Institute in Washington. “Right now, the priority should be keeping the economy on track and moving it forward,”  reported The New York Times.

Even more than interest rate increases, which are expected, most labor specialists are looking at the kinds of jobs that have shown the increase - mainly jobs for those that are highly educated and trained in a specific skill set.

For those without those desired skills, the outlook is bleak. Indeed, most employers say that finding the right workers is their number one problem to fill the 5.5 million job openings in the U.S..

Many displaced from high-paying manufacturing jobs in the past are unwilling to take jobs in minimum wage service jobs, yet paradoxically many do not see manufacturing at those previous levels and wages returning, any time soon.

Continuing from the Times, “Betsey Stevenson, an economist at the University of Michigan and a former economic adviser to Mr. Obama, said that manufacturing, while still a driving force in the economy, employed fewer and fewer people. More than 80 percent of jobs are now in the service industry, Ms. Stevenson said, and Mr. Trump should be thinking more about how to match workers with those jobs.”

This is not only a problem for the U.S., but is also a global problem say many

From the report, here are the leaders:

“Employment in professional and business services rose by 63,000 in November and has risen by 571,000 over the year. Over the month, accounting and bookkeeping services added 18,000 jobs”

“Employment [also] 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 (+22,000). Over the past 12 months, health care has added 407,000 jobs”

“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.