US labor market remains robust
In the US, employment rose by 227,000 in November, roughly as expected. However, around 100,000 of these jobs were due to special effects.
Commerzbank Economic Research
12/06/2024
The data ...
In November, non-farm payrolls in the US rose by 227k. This was roughly in line with expectations (consensus 210k, Commerzbank 220k). However, the figures for September and October were revised upwards to 255k and 36k respectively (previously reported: 223k and 12k). The unemployment rate rose slightly from 4.1% to 4.2% (consensus 4.1%, Commerzbank forecast 4.2%). Average hourly earnings rose relatively sharply by 0.4% mom. Year-on-year, wages rose by 4.0%, the same as in October.
... and the interpretation
When interpreting the November employment numbers, it should be noted that storms and a major strike had depressed the job growth in the previous month by an estimated 100,000. With the end of the strike and the severe weather, the increase was inflated by the same amount this time. The underlying trend is therefore more likely to be in the range of 100 to 150 thousand. However, today's report confirms the view that the weak October figures were due to special effects and did not signal an end to the recovery in the labor market. Another positive aspect is that employment growth in the last two months is better than initially reported.
At the same time, the decline in wage growth is stalling. Since the spring, these wage growth has been moving sideways at around 4%, which indicates that the labor market remains tight.
One small fly in the ointment, however, is the rise in the unemployment rate to 4.2%. It was only higher in July. Moreover, the increase is not due to more people entering the labor market, but rather to the fact that fewer people had a job, according to the relevant household survey. However, this statistic is less reliable. Therefore, it is best to wait for the next employment reports to see if this is a trend.
For full text see attached PDF-Version.
