November 2020 BLS Jobs Situation - Employment Grew 245,000 But Still Down 7,847,000 Year-To-Date

The headline seasonally adjusted BLS job growth continues to show decent job gains but was only half of expectations, with the unemployment rate improving from 6.9 % to 6.7 %.

Analyst Opinion of the BLS Employment Situation

Employment recovery from the coronavirus continues but at a slowing pace.

A summary from the report:

Total nonfarm payroll employment rose by 245,000 in November, and the unemployment rate edged down to 6.7 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it. However, the pace of improvement in the labor market has moderated in recent months. In November, notable job gains occurred in transportation and warehousing, professional and business services, and health care. Employment declined in government and retail trade.

The economically intuitive sectors were positive for economic growth.

The rate of further recovery will be dependant on the coronavirus effects.

  • The year-over-year rate of growth for employment improved by 0.1 % this month (red line on the graph below). The year-over-year growth rate is 6.4 % below the rate of growth one year ago.

  • This month's report internals (comparing household to establishment data sets) did not correlate with the household survey showing seasonally adjusted employment declining 74,000 vs the headline establishment number improving 245,000. The point here is that part of the headlines are from the household survey (such as the unemployment rate) and part is from the establishment survey (job growth). From a survey control point of view - the common element is job growth - and if they do not match, your confidence in either survey is diminished. [note that the household survey includes ALL job growth, not just non-farm).
  • The household survey removed 400,000 people from the labor force which explains much of the drop in unemployment.
  • The National Federation of Independent Business (NFIB)'s monthly Jobs Report is at the end of this post.

A summary of the employment situation:

  • BLS reported: +245K (non-farm) and 344K (non-farm private). The headline unemployment rate improved from 7.9 % to 6.9 %.
  • ADP reported: 307,000 (non-farm private)
  • In Econintersect's November 2020 economic forecast released in late October 2020, we estimated non-farm private payroll growth at -150,000 (based on economic potential) and -800.000 (fudged based on current overrun / under-run of economic potential). [because the decline was so steep and the recovery so steep, our forecast methodology is not accurate in this period]
  • The market expected (from Econoday):
Seasonally Adjusted Data Consensus Range Consensus Actual
Nonfarm Payrolls - M/M change 200,000 to 610,000 500,000 245,000
Unemployment Rate - Level 6.5 % to 7.0 % 6.8 % 6.7 %
Private Payrolls - M/M change 400,000 to 690,000 590,000 344,000
Manufacturing Payrolls - M/M change 22,000 to 50,000 40,000 27,000
Participation Rate - level 61.5 % to 61.9 % 61.6 % 61.5 %
Average Hourly Earnings - M/M change 0.0 % to 0.3 % +0.1 % +0.3 %
Average Hourly Earnings - Y/Y change 4.1 % to 4.6 % 4.3 % 4.4 %
Avg Workweek - All Employees

34.7 hrs to 34.8 hrs

34.8 hrs 34.8 hrs

The BLS reports seasonally adjusted data - manipulated with multiple seasonal adjustment factors, and Econintersect believes the unadjusted data gives a clearer picture of the job situation.

The following chart compares the job gains/losses this month with the same month historically.

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