Hale Stewart

About the Author Hale Stewart

Hale Stewart spent 5 years as a bond broker in the late 1990s before returning to law school in the early 2000s. He is currently a tax lawyer in Houston, Texas. He has an LLM from the Thomas Jefferson School of Law in domestic and international taxation where he graduated Magna Cum Laude and is also a Chartered Asset Manager, Chartered Wealth Manager and Chartered Trust and Estate Planner from the American Academy of Financial Management. He is the author of the book US Captive Insurance Law. You can read him daily at the Bonddad blog (www.bonddad.blogspot.com).

November Jobs Report: Enough for the Fed to Raise Rates

By New Deal Democrat


  • 211,000 jobs added to the economy
  • U3 unemployment rate unchanged at 5.0%

With the expansion firmly established, the focus has shifted to wages and the chronic heightened unemployment. Here’s the headlines on those:

Wages and participation rates

  • Not in Labor Force, but Want a Job Now: down -416,000 from 6.052 million to 5.636 million
  • Part time for economic reasons: up 319,000 from 5.767 million to 6.086 million
  • Employment/population ratio ages 25-54: up from 77.2% to 77.4%
  • Average Weekly Earnings for Production and Nonsupervisory Personnel: up $.01 from $21.18 to $21.19, up +2.0%YoY. (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)

September was revised upward by 8,000. October was also revised upward by 27,000, for a net change of +35,000.

The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were mixed.

  • the average manufacturing workweek was unchanged at 41.7 hours. This is one of the 10 components of the LEI.
  • construction jobs increased.by 46,000. YoY construction jobs are up 259,000.
  • manufacturing jobs fell by -1,000, and are up 28,000 YoY.
  • Professional and business employment (generally higher-paying jobs) increased by 28,000 and are up 298,000 YoY.
  • temporary jobs – a leading indicator for jobs overall decreased by -12,300.
  • the number of people unemployed for 5 weeks or less – a better leading indicator than initial jobless claims – rose by 80,000 from 2,326,000 to 2.406,000. The post-recession low was set 3 months ago at 2,095,000.

Other important coincident indicators help us paint a more complete picture of the present:

  • Overtime was unchanged at 3.2 hours.
  • the index of aggregate hours worked in the economy fell by -0.1% from 104.4 to 104.3.
  • The broad U-6 unemployment rate, that includes discouraged workers rose by 0.1% from 9.8% to 9.9%.
  • the index of aggregate payrolls rose by 0.1% from 125.6 to 125.7-.

Other news included:

  • the alternate jobs number contained in the more volatile household survey increased by 244,000 \jobs. This represents an increase of 2,031,000 jobs YoY vs. 2,609,000 in the establishment survey.
  • Government jobs rose by 14,000.
  • the overall employment to population ratio for all ages 16 and above was unchanged at 59.3% both m/m and YoY. The labor force participation rate rose by 0.1 from 62.4% to 62.5% and is down -0.3% YoY (remember, this incl udes droves of retiring Boomers).


This was actually a mixed report, with some good positives and some nasty negatives.

The positives, in addition to the headline jobs number, included substantial upward revisions in hours and jobs to last month. Those not in the labor force, but who want a job now, dropped by over 400,000 to a new post-recession low, more than outweighing the increase in involuntary part time workers. Construction and high paying professional and services jobs continue to increase. The prime age employment to population ration is now almost exactly halfway back to its peak almost a decade ago.

The negatives were first and foremost, wages, which after inflation, probably declined in November. The YoY change in wages for non-supervisory personnel is back to +2.0%. My biggest fear is that in the next recession, this will actually go negative, i.e., there will be outright wage deflation. Aggregate hours dropped month over (upwardly revised) month, and aggregate payrolls rose a pathetic 0.1%.. The YoY change in job growth continues to decelerate from its peak a year ago, continuing to signal that we are later in the economic expansion.

This will presumably be enough for the Fed to raise rates, the lack of wage-push inflation be damned. Hopefully they won’t drive the economy into a new recession next year.


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