Unemployment Rate Continues to Decline 12/6/13

The U.S. Labor Department released November labor statistics this morning that were better than originally anticipated.  Total nonfarm payrolls increased by 203,000 in November following a 200,000 increase in October.  Job growth has averaged 195,000 per month over the past 12 months.

The Department of Labor released the following labor statistics this morning:

In November, employment in transportation and warehousing rose by 31,000, with gains in couriers and messengers (+9,000), truck transportation (+8,000), warehousing and storage (+5,000), and air transportation (+3,000).

Health care employment continued to increase over the month (+28,000). Job gains occurred in home healthcare services (+12,000) and offices of physicians (+7,000), while nursing care facilities lost jobs (-4,000).

Job growth in health care has averaged 19,000 per month thus far this year, compared with an average monthly gain of 27,000 in 2012.

In November, manufacturing added 27,000 jobs. Within the industry, job gains occurred in food manufacturing (+8,000) and in motor vehicles and parts (+7,000).

Employment in professional and business services continued to trend up (+35,000) in November. Over the prior 12 months, the industry added an average of 55,000 jobs per month.

Retail trade employment also continued to expand in November (+22,000). Within the industry, job growth occurred in general merchandise stores (+14,000); in sporting goods, hobby, book, and music stores (+12,000); and in automobile dealers (+7,000). Over the prior 12 months, job growth in retail trade averaged 31,000 per month.

Within leisure and hospitality, employment in food services and drinking places continued to trend up in November (+18,000). Job growth in this industry averaged 28,000 per month over the prior 12 months.

Employment in construction continued to trend up in November (+17,000). Monthly job gains in the industry averaged 15,000 over the prior 12 months.

Federal government employment continued to decline (-7,000) in November. Over the past 12 months, federal government employment has decreased by 92,000.

Employment in other major industries, including mining and logging, wholesale trade, information, and financial activities, showed little or no change in November.

The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.5 hours in November. The manufacturing workweek edged up by 0.1 hour to 41.0 hours, and factory overtime edged up by 0.1 hour to 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.7 hours.

In November, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $24.15. Over the year, average hourly earnings have risen by 48 cents, or 2.0 percent. In November, average hourly earnings of production and nonsupervisory employees increased by 3 cents to $20.31.

Although the unemployment rate continues to trend down the labor force participation rate is hovering around just 63%.  The chart below illustrates the decline in the labor force participation over the past 10 years.  As labor conditions continue to improve we would expect the participation rate to gradually increase as people who have given up looking for job have enough confidence to start looking again.

Labor Force Participation Rate

Data extracted on: December 6, 2013

Provided by: United State Department of Labor

Federal Reserve

The Federal Open Market Committee meets later this month on December 17 & 18 and investors will be anxiously awaiting news on whether or not they decide to begin tapering their monthly bond purchases.

Many economist believed that the Fed would begin tapering in January, but the better than expected employment figures released today may put additional pressure on FOMC members to put the brakes on their accommodative policy.  We will continue to monitor these developments closely and keep you updated on our sentiment and expectations going forward.


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