Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Nonfarm Payrolls Increased 211,000 in November
Posted Under: Data Watch • Employment
Supporting Image for Blog Post

 
Implications: Another batch of solid figures on the labor market all but seals the deal that the Federal Reserve will (finally!) start raising short-term interest rates on December 16. Payrolls increased 211,000 in November and were revised up for both September and October. Meanwhile, civilian employment, an alternative measure of jobs that includes small business start-ups rose 244,000 while the unemployment rate remained 5.0% and the labor force grew 273,000. Notably, payrolls at home builders spiked up 32,000 for the month, the largest increase in residential construction for any month since 2005. We expect continued strong gains in home building jobs in the year ahead as that sector continues to ramp up activity. Moreover, workers' earnings continue to move higher. Average hourly earnings rose 0.2% in November and are up 2.3% versus a year ago. (Remember, this measure excludes irregular bonuses/commissions and fringe benefits, and given rising health care costs is probably understating the growth in employment costs.) And although total hours worked slipped slightly in November itself, they were revised up substantially for October. As a result, total hours worked are up 1.9% versus a year ago and total wages are up 4.2% in the past year, more than enough to support further increases in consumer spending. Despite the good news, we fully expect some analysts to dwell on any negative information they can find. This month, that's likely to be a 137,000 increase in part-time jobs. However, the household survey, where that data comes from, is very volatile from month to month and part-time jobs are still down 455,000 from a year ago. Because of the monthly gain in part-timers, the U-6 unemployment rate, what some analysts call the "true" unemployment rate because it includes discouraged workers and part-timers who say they want full-time work, rose to 9.9% from 9.8% in October. However, the U-6 rate was 11.4% a year ago and peaked at 17.1% in 2009-10, so even the U-6 rate is down substantially in the past several years. Although it ticked up to 62.5% in November, the labor force participation rate remains very low, a reflection of retiring Boomers, too easily available disability benefits, and overly generous student aid. The bottom line is the trend in payroll growth remains just north of 200,000 and should expand about 2.5 million in 2016, enough to keep the Fed raising rates at least a few times next year.

Click here for a PDF version
Posted on Friday, December 4, 2015 @ 11:26 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.