Job seekers navigate through a better labor market but still teetering economy. (Photo: REUTERS)
The U.S. economy created 321,000 jobs in the month of November, easily beating the 230,000 economists expected and the biggest increase since January 2012, according to the Labor Department.
The results, which vary widely from the private sector report Wednesday conducted by independent payroll processor ADP, show a solid month of employment growth that will definitely weigh heavy on the Fed’s decision to hike interest rates.
The headline unemployment rate was unchanged at 5.8 percent and the number of unemployed persons was little changed at 9.1 million. Economists had forecast the unemployment rate would hold steady from a month earlier, the unemployment rate for adult men rose to 5.4 percent.
The number of long-term unemployed — or, those jobless for 27 weeks or more — was little changed from the month prior at 2.8 million in November. These individuals accounted for 30.7 percent of the total unemployed. Civilian labor force participation remains abysmal at 62.8 percent, a thirty-plus year low, while the employment-population ratio, which is less cited but a more important indicator, remains at a terrible 59.2 percent.
With such a vibrant month of job creation, we should have seen better gains on these two measurements, but both have remains unchanged in November. The employment-population ratio is up by just 0.6 percentage point year-over-year.
November was the tenth consecutive month in which the U.S. gained 200,000 or more jobs, but the economy must add 250,000 jobs on average monthly to keep pace with population. Fortunately, jobs created in September and October were revised upward by 44,000 jobs, and average hourly wages in November rose more than anticipated.
However, 6.9 million workers are employed part-time because they cannot find full-time work or have had their hours cut back, while 698,000 discouraged workers remained convinced there are no jobs available to them. A total of 2.1 million persons remain marginally attached to the workforce.
The November numbers were expected to be stronger-than-usual due in part to seasonal hiring for the holidays, specifically among package delivery companies such as FedEx (NYSE: FDX) and UPS (NYSE:UPS).
While labor markets appear to be strengthening — if we just look at the headline unemployment rate — the Fed says other labor market indicators suggest a slower recovery for many U.S. workers. Average hourly wages have been stagnant for months and increased by just .9 cents in November, a key factor that has kept inflation running well below the Fed’s target rate of 2 percent. Over the past year, average hourly earnings have increased by just 2 percent, nowhere near the Fed’s target.
Wages are now the key indicator for economists attempting to determine when the Fed will start raising interest rates.
The Fed says it won’t start raising rates until it reaches its dual mandate of full employment and price stability, but neither targets seem achievable in the short-term. So, they will just modify the two targets if need be. The central bank has defined the former as an unemployment rate in a range of 5.2 percent – 5.6 percent, and the latter as an annual inflation range of 1.7 percent – 2 percent .
The unemployment rate is likely to drop into that desired range in early 2015 given the weak labor force participation rate, but the inflation target is a clear challenge. Inflation isn’t likely to move higher until wages go up significantly, and most economists say that is likely not going to happen until late 2015.
However, there is a danger to rapid wage growth — inflation. If and when wages rise too quickly, then it will lead to runaway inflation and inevitably eat up corporate and small business profits.
Wage growth and other inflationary indicators are currently — and, should be — at the heart of the growing debate within the Fed over the timing of rate hikes. The consensus among Fed economists is that hikes should and will occur in mid-2015, early enough to stave off runaway inflation, while remaining low long enough to continue providing stimulus to what is still fundamentally a very fragile economy and an even more fragile recovery.
If and when interest rates increase, which they will with or without the Fed’s control, it will raise borrowing costs for not only businesses, but for a government that just surpassed $18 trillion in total federal debt. It will make borrowing more expensive for consumers, as well, including transactions on a mortgage or a car loan. It will be extremely difficult for small businesses, too, to get a loan for expansion.
The most damning journalistic sin committed by the media during the era of Russia collusion…
The first ecological study finds mask mandates were not effective at slowing the spread of…
On "What Are the Odds?" Monday, Robert Barnes and Rich Baris note how big tech…
On "What Are the Odds?" Monday, Robert Barnes and Rich Baris discuss why America First…
Personal income fell $1,516.6 billion (7.1%) in February, roughly the consensus forecast, while consumer spending…
Research finds those previously infected by or vaccinated against SARS-CoV-2 are not at risk of…
This website uses cookies.
View Comments
The unemployment rate has been cooked for many years now but it became almost total fiction under Bush and Obama ( see the "birth / death adjustment" ).
yeah, yeah, yeah whatever. I'm sure that Republi-Cons have never cooked the books.
I could be wrong on this but there was a rumor going around that Bush was a republican.
Oh, you think Bush was a Democrat.
heheh....another public school gruberite checks in.
Going all the way back to Truman, every time we've had Democrats take over the White House for 8 years, they take if from Republicans' with unemployment ABOVE 6.5% then, 8 years later, unemployment is below 5%? Truman (Democrat), leaves White House January 1953 Unemployment Rate = 2.9% Kennedy/Johnson (Democrats), leave White House January 1969 Unemployment Rate = 3.4% Clinton (Democrat), leaves White House January 2001 Unemployment Rate = 4.2% Based on the history of Democratic White Houses, you can expect unemployment will get below 5% before the end of President Obama’s 2nd term.
more statistics from the climate people. The unemployment number has been redefined by bogus democrat economists for so long, they count ducks crossing the street as employed. Thanks though, the public school socialist gruberites will swallow this piece of sht like goose liver. the real unemployment number is still hovering around 10%.
If in fact the number is closer to 10% then you need look no further than those dumb@$$ Republi-Cons who put us in this predicament in the first place. Democrats seem to clean up the crap left by the Republicans wake all of the time. It's always people like you coming out of the woodwork saying it isn't so. Whatever, go back under the rock you live under and shut it.
shut the fk up you loopy liberal socialist bumblefk......asked and answered. go play over at rosie odonnell's and do some lolling with your bff's . You are doing a ghost dance for a dead socialist narrative. you are preterite.
Lol are you mad or something.
lol? face book talk huh sparky? go back and do so lolling with your bff's. Boston strong.....heheh....boston....what a shit hole......who the fk would want to live or work in boston.
Tne only thing stromg in demorap boston is the stench
This is coming from someone who has commented over 6200 times on various articles on the WSJ. Trolling at it's finest. Thank you Dan
what a fking moron you really are. you can't even translate the comment numbers from disgus right. And I love the word troll. I cherish the accusation from the left. Go back to face book fk mutt and do some lolling with your bff's .
Thank you for perfect example of why no one respects your opinion.
yeah....you speak for everyone do ya sparky?....classic public school gruberite....take you hand out of your pants and stop licking your fingers you Obama fk mutt.
Thanks for the numbers and logical presentation of trends Boston.....and thanks for your simple-minded rhetoric Silver. A simple response from a simple man.
The tendency for unemployment to drop under Democratic Presidents and rise under Republican presidents is so stark that people assume the data is fake. People assume that if it really were that stark, nobody would ever vote Republican... But it really is that stark and yet people do still vote Republican- http://politicsthatwork.com/graphs/unemployment-rate-by-president
Can you spell DECEMBER?
The numbers are seasonally adjusted.
People who self-identify with the cult of conservatism are Conservatives first and people second.
"The number of long-term unemployed — or, those jobless for 27 weeks or more — was little changed from the month prior at 2.8 million in November. These individuals accounted for 30.7 percent of the total unemployed. Civilian labor force participation remains abysmal at 62.8 percent, a thirty-plus year low, while the employment-population ratio, which is less cited but a more important indicator, remains at a terrible 59.2 percent."
This is how Democrat controlled government works. The phoney decrease in unemployment is because there are more low paying Democrat jobs being created. The people who work there jobs ALL require some form of government assistance .. these are Democrat Government dependent jobs. The Democrat plan to have majority of citizens dependent on Democrats so they have to vote for Democrat for their even meager existence. This is the reason Democrats want even more illegal aliens to get jobs and citizenship ... more low paid Democrat government dependent voters.
Democrats don't care about you ... they only care about your vote.
Cons only care about Cons and beating up anyone they perceive as liberal which is everyone who is not a Con.
You're one of
those Democrap slobs who's only reason for existence is to take your government handouts and vote democrap.
For a change, let us celebrate this good news without blaming any politician/political party or giving any politician/political party the credit for it. Let us hope the economy improves even more.
yippee ki yay, working at the Mall wrapping presents for Christmas. Another one of Barney Fife Bozama's sleazy jokes
Yes "moving in the right direction," here's one of those newly created jobs:
http://youtu.be/YTeu4EHFX0I