U.S. Firms Surprise Big With 321,000 Jobs in November
The Labor Department also reported Friday that average hourly earnings surged 9 cents to $24.66.
An employee moves material at Ford's Dearborn Truck Plant in Dearborn, Mich., on Nov. 11. Payroll gains since January make 2014 the strongest year in that category since 1999, according to the Labor Department's latest jobs report.
American businesses added a robust 321,000 jobs in November, capping the 10th straight month of job gains over 200,000 – a sign the labor market is on track to wrap up the strongest year of the recovery yet. Hourly earnings also jumped last month after months of little movement.
The Labor Department’s payroll figure comes after an October gain of 243,000, which was greater than originally reported. The unemployment rate was flat at 5.8 percent. Bloomberg-surveyed economists had called for a job gain of 230,000 and an unchanged unemployment rate.
Payroll gains since January make 2014 the strongest year already for payroll gains since 1999, barring any big downward revisions. Consistent job growth indicates the economy is starting to iron out slack that’s kept wages subdued and central bankers wary about the strength of the labor market.
“The economy's growing above trend, the labor market is tightening, the unemployment rate is trending down,” Jeremy Lawson, chief economist at global asset manager Standard Life Investments, said before the report. “So almost all data are pointing in the same direction: That the economy's probably healthier than it's been at any other point during the recovery.”
[ADP: Firms Hire 208,000 in November ]
The participation rate, which measures the share of adults either working or actively looking for work, was flat at 62.8 percent from October, the Labor Department also reported.
The unemployment rate looks to have been falling for the right reasons recently. When it declines as the participation rate also drops, it just means that more people are dropping out of the labor force. But when it declines as the participation rate rises, it’s a sign Americans are feeling upbeat enough about the labor market to start looking for and finding work again.
Friday’s report confirmed, though, there remains stubborn labor market slack, which refers to parts of the potential labor market that aren’t operating at their full potential.
The number of Americans who’ve been unemployed for 27 weeks or more – a group that makes up almost a third of the unemployed population – was 2.8 million in November, little changed from October. Over the past year, the number of those unemployed long term has decreased by 1.2 million.
The count of people working “part time for economic reasons” was relatively flat last month at 6.9 million. Also referred to as “involuntary part-time workers,” these adults were working part-time because their hours had been slashed or because they can’t find full-time jobs.
In November there were 2.1 million marginally attached workers, meaning they’re not in the labor force, but had sought work at some point over the past year. Those individuals aren’t counted in the unemployment rate.
There were 698,000 discouraged workers last month, about the same as last year. These people aren’t looking for work because they don’t think there are any jobs out there for them.
The Federal Reserve refers to slack as “underutilization of labor resources,” but recently has acknowledged that it’s “gradually diminishing.” Concern about slack has helped convince Fed officials like Chair Janet Yellen that the economy’s still weak enough to necessitate the extra-low interest rates the Fed maintained since 2008 to ease growth through cheaper bank lending.
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The Fed and other economy-watchers also have long been concerned about wage growth, which has just barely kept up with the cost of living. But according to Friday’s report, average hourly earnings jumped 9 cents to $24.66 in November and have risen 2.1 percent over the past year. Another recent measure of the cost of labor, which tends to fluctuate with wages, advanced 0.7 percent in the third quarter.
Higher wages are a sign employees are starting to gain more leverage as firms try to stay competitive to attract talent. One other sign of the growing power of workers is improvement in the quits rate, which rose to 2 percent, the Labor Department reported last month, after hovering stubbornly around 1.8 percent for months. This means workers are feeling comfortable enough about their job prospects to leave one in pursuit of another.
