DETROIT – THE U.S. unemployment rate in November dropped to its lowest level since August 2007, before the great recession began, to 4.6 percent, putting it within putting distance of the low for the previous cycle of 4.4., Comerica Bank reported.
But expectations for the official payroll job numbers for November were boosted by a stronger-than-expected ADP Employment Report released on Wednesday. The 178,000 net new jobs added to the U.S. economy in November is a solid number, the economists said in a press release.
The large drop in the unemployment rate came as the household survey of employment increased by 160,000 for the month, and the labor force decreased by 226,000 after falling by 195,000 in October. Despite the last two monthly declines, the year-over-year trend in the labor force is increasing, showing that the labor market is still broadening. Average hourly earnings dipped by 3 cents in November after gaining 11 cents in October. Over the previous 12 months, average hourly earnings were up by 2.5 percent. Average weekly hours were unchanged at 34.4.
Establishment data for November was mostly positive but there were a couple of head-scratchers. Mining and logging employment increased by 2,000 jobs with help from oil and gas extraction, consistent with a gradual increase in the rig count. Construction added 19,000 jobs. Manufacturing employment dipped by 4,000 jobs with losses in durable goods industries. Wholesale trade added 2,800 net new jobs. Retail trade surprisingly lost 8,300 jobs in November. Transportation and warehousing gained 8,900 jobs. Information industries dropped 10,000. Finance gained 6,000 jobs for the month. Gains in professional and business services were strong at 63,000 net new jobs. Education and healthcare added a solid 44,000 jobs. Leisure and hospitality served up 29,000 jobs. The government sector was strong, adding 22,000 net new jobs in November.
Labor market data looks good. We see no reason why the Federal Reserve will not follow through on the widely expected 25 basis point increase to the fed funds rate range on December 14. The fed funds futures market places the implied odds of a December 14 rate hike at about 95 percent.
