Reclaiming Common Sense

Will this Remarkable Jobs Report Take the Peloton Ad Out of the News Cycle?

Best November "Ever"

The Monthly Employment Situation Report is a market mover. The report is created using two different data sets: the Current Population Survey (CPS) jobs and unemployment data and the Current Employment Statistics (CES) worker and wages data.

It was thought that we could record the addition of another 400,000 private sector workers this month.  The seasonal factors meant that we could have  reported the addition of 189,000 to 228,000 private sector workers this month. The November to November data was expected to report growth in all sectors, especially M/L, Construction, PBS, EHS, LAH, and Manufacturing. Unemployment was expected to fall - seasonally adjusted or non-seasonally adjusted.

We Added 504,000 non-seasonally adjusted private Sector workers this month. This is not what was reported. This was the best November private sector number since 1979. This was not reported. Baby Yoda Tart was reported. The Peloton Princess Drama was reported. Again. Last month's October NSA number was revised higher by 48,000 workers. This means that between the two we added 552,000 private sector workers.

We added 620,000 Non-Seasonally Adjusted Non-Farm Payroll Positions. This was not reported. The headline here was 266,000 seasonally adjusted NFP workers were added. October was revised higher by 40,000. This means the headline addition was really 660,000 NSA NFP workers added since the last report.

We added 266,000 seasonally adjusted Non-Farm Payroll Workers. We added 254,000 SA Private Sector Workers. The SA NFP was revised up 41,000 for October so the headline could have been +307,000. The SA Private Sector data for October was revised up 48,000 so that number could have been +302,000

We had our largest October to November Growth Rate since 1979 at 0.39%. The last time we hit this level the President was Bill Clinton. Peloton did not even come out until 2012. Baby Yoda wasn't in production.

Our Second Lowest November Seasonal Factor, had we. The lower the seasonal factor the lower that the seasonally adjusted CES data is reported. This is the aggregate value. Each sector has its own seasonal factor. Seasonal factors change month by month and year by year.

How high Should the "Jobs Number" have been reported?  If we had the same seasonal factor that was used during former President Obama's final November in office then we would have had this number reported at 351,000 workers added - private sector workers. October than last reported. If you add 48,000 to 351,000 then you get a 399,000 headline number. This would have been comparable to November 1994.

The CES data includes data on worker and wage data by sectors. This column will address the worker and wages data next week. Wages have been setting current month records all year long. This is expected to continue. Will hours worked improve? Will more workers lighten the hourly load? What about total wages? Multiple workers by hours by wages and this could be an explosive report.

Non-Seasonally Adjusted (CPS) Jobs were expected to rise. Seasonally Adjusted Jobs were also expected to report a rise - both Full-time and Part-time.  Last Year the November Participation rate and the Unemployment rate both fell. It was expected that the Multiple Job Worker data to rise month to month and November to November. Expect the number of women in the workforce to rise through the end of the year. Men, on the other hand, are expected to see jobs decline through January.

Non-Seasonally Adjusted Full-tome jobs dropped, as they normally do during November. We also saw a spike in part-time jobs, as normally happens during November. This November, just as happened during November 2014 and November 2017 there was a net loss of jobs. This year this column has written numerous articles regarding the "Tale of Two Data Sets." How can we lose 122,000 net jobs while we gained 504,000 private sector workers and another 116,000 government workers. Different data sets. Different Sample sizes, Different measure with workers versus jobs.

The Unemployment level recorded a drop and reported a drop, as expected. The non-seasonally adjusted data dropped by 69,000 while the seasonally adjusted data fell by 44,000 workers. This was the lowest unemployment level for the month of November since November 1999 and November 2000. This month we have5.441M unemployed workers. We had 5.380 million November of 1999 and 5.336 million November 2000.

The Unemployment rate Dropped to tie the lowest level since November 1968 and November 1969. All three months have a unemployment rate of 3.3% This is Huge. A drop in unemployed workers and a drop in net jobs means that the participation rate fell. This, too, is normal during November.

We have the best November Participation rate since November 2012. The Labor Force Participation Rate (LFPR) peaked during the end of the 1990s. The LFPR started to slide during 2009 after stabilizing during 2005-2008. It has started climbing during the past three years after hitting a nearly 50 year low during January 2017.

  • 2000: LFPR 66.87% U-3 3.74%
  • 2012: LFPR 63.46% U-3 7.36%
  • 2019: LFPR 63.22% U-3 3.31%

The differences between the participation rates and unemployment rates mean that he effective unemployment rates are very different. mean that the 2000 unemployment rate is the standard. The U-7 during 2012 was 12.09%. The U-7 this month is 8.59%. We do not have the same unemployment rate as we did during 2000 because we do not have the same participation rate.

This report is more than just one number. This report is created using two data sets that have been in conflict with each other all year. Expect good news because of GM workers returning to work. Good news was expected because of Christmas hiring in Trade, transportation and Utilities (TTU,) Information ( IT, ) Education and Health Services (EHS), and Professional Business Services (PBS.) We will see what happened with regard to hours worked, hourly wages, and total workers by sector in the Wages and Workers Article.

How is President Trump doing compared to the previous two-term Presidents, former Presidents Reagan, Clinton, George W Bush and Obama? The initial look indicates that President Trump is catching up with former President Reagan's participation rate and former President Obama's participation rate. He has created more full-time jobs than any of the four Presidents after 34 months in office, and trimmed unemployment. Only President Trump and Former President Clinton reduced unemployment and grew full-time jobs.

How are men and women doing? We have a record level of November men and women working in the workforce. This and the multiple job level worker data will be covered in the Men and Women article.

It's the Economy.