Research
November BLS Report: Labor Market Powers On as Payrolls Smash Expectations
Daniel Zhao
Chief Economist at Glassdoor | Dec 6, 2019
The latest jobs numbers are out from the U.S. Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor Senior Economist Daniel Zhao:
The unemployment rate dipped back down to 3.5 percent, tying the lowest rate since December 1969. If the labor market can maintain this unemployment for one more month, it will be a true 50-year low.
Workers returning from the GM-UAW strike boosted manufacturing, but if you exclude that temporary bump, manufacturing has basically been flat over the last 2 months, indicating that the industry is still facing headwinds from the U.S.-China trade war. Services sectors, however, continue to add tens of thousands of jobs, carrying the labor market in 2019.
That being said, employment growth in services is still slightly slower than the beginning of the year. The labor market slowdown has been primarily driven by a dramatic deceleration in goods-producing sectors since mid 2018.
Wage growth in November ticked down to 3.1 percent, after October wages were revised up. Wage gains seem to have peaked in early 2019 and workers may have to wait until the new year to see pay growth accelerate agian.
Retail added just 2,000 jobs on a seasonally adjusted basis. October numbers had previously signaled that retail may break its 3 year streak of job losses with a strong start to the holiday season, but the latest figures from November seem to imply that job gains were simply pulled forward earlier into the year. Despite strong consumer spending, it appears that consumer dollars shifting online to e-commerce is continuing to eat away at employment at traditional retailers.
To speak with Daniel Zhao about today’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.
Commentary
The labor market shows no signs of stopping in November as payrolls smashed expectations in this morning's jobs report from the Bureau of Labor Statistics. Employers added 266,000 jobs to payrolls, well above estimates of 180,000. Payrolls were up partly by a temporary increase in auto manufacturing (+41,300) following the end of the GM-UAW strike, but even excluding that bump, payrolls would've still cleared the 200,000 mark. Unemployment ticked back down to 3.5 percent, matching its 50-year low. Overall though, figures in the household survey were relatively unchanged with the labor force participation rate ticking down by 0.1 percentage point but employment-population ratio staying flat. Wage growth ticked down to 3.1 percent after revisions. Wage growth has been stubbornly low and decelerating in 2019 after a false start at the beginning of the year. While the labor market is tight, it does appear that workers may have to wait for the new year to see accelerating wage gains. This report has important political implications as we move into an election year—the report today alleviates pressure on the Trump administration to make a trade deal with China, giving negotiators more leverage to push for a harder line. The labor market has been a consistent bright spot for the American economy over 2019, and it looks poised to end the year with a bang.More Insights
Payrolls also extend a record-long streak of continuous job gains to 110 months in November. 2019 average monthly job gains is now 180,000, up from an average of 167,000 based on last month's data.
The unemployment rate dipped back down to 3.5 percent, tying the lowest rate since December 1969. If the labor market can maintain this unemployment for one more month, it will be a true 50-year low.
Workers returning from the GM-UAW strike boosted manufacturing, but if you exclude that temporary bump, manufacturing has basically been flat over the last 2 months, indicating that the industry is still facing headwinds from the U.S.-China trade war. Services sectors, however, continue to add tens of thousands of jobs, carrying the labor market in 2019.
That being said, employment growth in services is still slightly slower than the beginning of the year. The labor market slowdown has been primarily driven by a dramatic deceleration in goods-producing sectors since mid 2018.
Wage growth in November ticked down to 3.1 percent, after October wages were revised up. Wage gains seem to have peaked in early 2019 and workers may have to wait until the new year to see pay growth accelerate agian.
Retail added just 2,000 jobs on a seasonally adjusted basis. October numbers had previously signaled that retail may break its 3 year streak of job losses with a strong start to the holiday season, but the latest figures from November seem to imply that job gains were simply pulled forward earlier into the year. Despite strong consumer spending, it appears that consumer dollars shifting online to e-commerce is continuing to eat away at employment at traditional retailers.
To speak with Daniel Zhao about today’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.Daniel Zhao
Daniel Zhao is Chief Economist at Glassdoor. On Glassdoor's Economic Research team, he has conducted research using Glassdoor's unique data on a variety of topics affecting job seekers and employers ranging from the health of the job market to pay transparency to employee engagement & retention. His work has been cited in publications like the New York Times, the Harvard Business Review and more. Prior to joining the Economic Research team, he also worked on improving the user experience for Glassdoor’s consumer jobs product and mobile app. He holds a bachelor's degree in applied mathematics and economics from Harvard College.
Tags:Labor MarketUnemployment
