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At Last this morning we got some up to date labor data from the federal government, but only partially. The Establishment Survey was updated for both October and November, while the Household Survey was not conducted at all for October, and so jumps from September to November.

In November virtually all of the other reports, including from the regional Feds and ISM, as well as others, indicated an actual decline in employment. While that didn’t occur, as we will see below, the general tenor was negative, albeit nuanced.

Below is my in depth synopsis. Note that for the Establishment numbers, I give both October and November reads, as well as the two month net change.

HEADLINES:

• -105,000 jobs lost in October; 64,000 added in November for a net change of -41,000.
•  Private sector jobs increased 52,000 in October and 69,000 in November, for a net gain of 121,000. Government jobs declined -157,000 in October (these are mainly the delayed DOGE layoffs), and another -5,000 in November for a total loss of -162,000.
• September was revised downward by -11,000 to +108,000. 
• The alternate, and more volatile measure in the household report, rose by 96,000 jobs since September.
• The U3 unemployment rate rose 0.2% to 4.6%, since September, the highest since September 2021.
• The U6 underemployment rate rose 0.7% to 8.7% since September.
• Further out on the spectrum, those who are not in the labor force but want a job now rose 203,000 since September to 6.136 million, aside from August the highest level since September 2021.

Leading employment indicators of a slowdown or recession

These are leading sectors for the economy overall, and help us gauge how much the post-pandemic employment boom is shading towards a downturn. For the second month in a row they were mainly negative:

• The average manufacturing workweek, one of the 10 components of the Index of Leading Indicators, rose 0.1 hour in both October and November to 41.2 hours, but remains down -0.4 hours from its 2021 peak of 41.6 hours.

• Manufacturing jobs decreased by -9,000 in October and -5,000 in November, the sixth and seventh declines in a row. This series declined sharply in the second half of 2024 before stabilizing earlier this year. It is now at a 3.5 year low.
• Truck driving, which had briefly rebounded earlier this year, declined -1,300 in October and another -4,400 in November, for a total decline of -5,700.
• Construction jobs declined -1,000 in October, but rose 28,000 in November.
• Residential construction jobs, which are even more leading, rose 900 in October and another 3,400 in November for a total of 4,300, making three increases in a row.
• Goods producing jobs as a whole declined -9,000 in October, but rose 19,000 in November, for a net gain of 10,000, after declining earlier this year for 4 months in a row. 

• Temporary jobs, which have declined by over -650,000 since late 2022, declined again in both October, by -12,700, and November, by -5,000, for a total decline of -17,000, a new post-pandemic low.
• The number of people unemployed for 5 weeks or fewer rose 316,000 from September to November,  to 2,543,000, the highest number since the end of 2020.

Wages of non-managerial workers 

• Average Hourly Earnings for Production and Nonsupervisory Personnel increased 0.4% in October and another 0.5% in November, for a net gain of 0.9%, with a YoY gain of +3.9%. This continues to be significantly above the 3.0% YoY inflation rate through September.

Aggregate hours and wages: 

• The index of aggregate hours worked for non-managerial workers was unchanged in October, but increased 0.1% in November, and is up 1.3% YoY, its highest rate since January.

• The index of aggregate payrolls for non-managerial workers rose 0.4% in October and another 0.5% in November, and is up 5.2% YoY, its highest rate since April.

Other significant data:

• Professional and business employment declined -7,000 in October, but rose 12,000 in November, for a net change of 5,000. These tend to be well-paying jobs. This is the fifth decline in a row, and is the lowest number in over 3 years. It is also lower YoY by -0.2%, which in the past 80+ years - until now - has almost *always* meant recession. This is vs. last spring when it was down -0.9% YoY.
• The employment population ratio declined -0.1% to 59.6% from September through November, vs. 61.1% in February 2020.
• The Labor Force Participation Rate rose +0.1% to 62.5% from September through November, vs. 63.4% in February 2020.

SUMMARY

Looking at this from the perspective of the meet two month changes, it was a poor report with only a few bright spots.

Let me note the bright spots first: construction employment, and wage growth. Despite the pounding that the housing market has taken, residential construction employment made a new post-pandemic high in November. And the residential sector was relatively the weakest one within construction. Non-residential construction employment rose sharply - I suspect due to AI-data center building.

Additionally, wages grew sharply in both October and November, which also powered a sharp rise in aggregate payrolls, a very good sign. Additionally, manufacturing showed signs of life as the average workweek in that sector rose.

But these were outweighed by all the negatives. On net, jobs contracted by -41,000 since the last report. Unemployment rose 0.2%, and underemployment rose by 0.7%, both to multi-year highs. Both short term new unemployment and those who want a job are not even looking rose to close to post-pandemic highs. Employment declined in manufacturing, trucking, and temporary help - all leading sectors. And while labor force participation rose, the employment to population ratio declined.

Right now the only sectors holding employment afloat are health care, which on net accounted for all of the gains in the past few months, as well as construction (likely mainly related to AI data center spending). In the seven months since April, only 119,000 jobs have been added, an average gain of only 17,000 jobs per month. And that’s before the likely downward revisions which will be made once the QCEW is integrated into the results.

In summary, the jobs market is either a hairs-breadth above contraction, or actually in contraction.

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