An In-Depth Look At the Jobs Report

The unemployment rate edged down to 10.0 percent in November, and nonfarmpayroll employment was essentially unchanged (-11,000), the U.S. Bureau of Labor Statistics reported today. In the prior 3 months, payroll job losse had averaged 135,000 a month. In November, employment fell in construction manufacturing, and information, while temporary help services and health care added jobs.

Let's look at the data:


First of all, the trend of establishment jobs continues in the right direction. Notice the rate of job loss continues to decrease. However,


While the unemployment rate dropped last month, the overall trend is still rising. We need a few more months of data before we can claim a change in the overall trend.

There are some other good tidbits of news in the report.

A.) The civilian labor force dropped and the number of employed people increased. This goes to the method of calculating the unemployment number. The decrease in the unemployment rate was caused by an increase in employment -- not a statistical "method of calculation" issue.

B.) Good producing employment is still down: construction jobs decreased by 27,000 and manufacturing jobs decreased by 41,000.

C.) Professional services saw an increase of 86,000. Health care/education jobs increased by 40,000.

D.) Government jobs only increased by 7,000 -- so this is not a "public sector" job creation issue.

E.) Temporary employment increased 52,000. It has increased 117,000 since July. This is a leading indicator; firms typically hire temporary employees before full time employees.

F.) Hours worked increased as did overtime hours worked.

And there is reason to believe this overall trend will continue.

The pace of initial unemployment claims continues to move in the right direction -- down. The 4-week moving average has been dropping since the spring. This trend is further confirmed by the Challenger job cut report:

This is a damn good report. And the overall positive trend -- the pace of job losses continues to drop. At this rate, we should see job growth within the next 3-6 months.