U.S. Payrolls Rise by Another Slow But Steady 199,000 in November

The trend continues the American economy settling in to a new, lower, but still continually growing rate of job growth last month.

The total nonfarm payroll increase last month was 199,000. While that is up by one-third from the 150,000 increase as of the end of October, much of that increase came from this being the first full month that workers idled by the United Auto Workers strike which began in September but were settled in-October were back on the job for a full month. November was also when the SAG-AFTRA actors’ union members which had been on strike for months also returned to work for much of the month. They had been on strike since July over wages, benefits, royalties especially in the streaming industry, and issues regarding how artificial intelligence might be used by the television, motion picture, and streaming services industries in the future.

At the same  time 199,000 new employees were added to organizational payrolls last month, unemployment numbers came down slightly from October. The total number of unemployed shrank slightly from October’s 6.5 million to 6.3 million as of November 30. In line with that, the unemployment rate also fell, from 3.9% to 3.7%.

Labor Analysis by Industry

This month, the health care and government sectors continued to lead job growth, with manufacturing also heading upwards more than in the past thanks to the return of the auto industry workers.

At the top of the list, the health care sector grew by 77,000 jobs, for a net 32.7% increase in new employees compared to October’s 58,000 increase. Within this area, ambulatory health care services had the strongest gains, with 32,000 adds. Hospitals across the country added 18,000 and residential care facilities grew their payrolls by 8,000.

Government jobs came in as the second-fastest growing sector last month, by a net of 49,000 new people added. Most of that came from local and state governments, which increased their hiring by 32,000 and 17,000 for the month, respectively. The 49,000 total job increase in government was in line with its average hiring rate of 55,000 jobs/month for the last twelve months.

Manufacturing came in at a strong number three in the hiring list. It brought back on board or hired as new a total of 28,000 for the month. The return to work by auto workers brought on a total of 30,000 people for the month. The slight difference between that and the totals reflects some softening of manufacturing in other sectors of the economy.

In fourth place was the leisure and hospitality industry. It added 40,000 jobs this month, a dip compared to the average hiring in this area of 51,000 new people added each of the previous twelve months. Almost all the new hiring in this job sector came from the food service and drinking establishment sub-sector.

Social assistance jobs came in next, with 16,000. That number represents a significant decline from the average of 23,000 added per month since December 2022. The individual and family services subsector here was a major reason for the number not declining further, however; it brought on board 9,000 new people for the month.

Retail trade employment grew by the sixth highest number last month. It added 38,000 new employees as of November 30. Despite those overall numbers being similar to what happened in much of the past year in this area, two retail areas stood out as seeing hiring decline significantly. Department store retail positions fell by 19,000 this time, and there were 6,000 fewer positions in the furniture, home furnishings, electronics, and appliance retailers category.

Next was the information jobs category. Overall employment was flat in this area from October to November. Hiring was up in the motion picture and recording industries, with 17,000 people hired, mostly from returns-to-work as the actors’ strike was settled. Other jobs in information declined. Total employment in this area is down by 104,000 since it hit its post-pandemic peak employment numbers in November 2022.

The transportation and warehousing area fell slightly for the month, with 5,000 less employees this time. The warehousing and storage area’s decline of 8,000 jobs was largely responsible for this, with a net increase of 4,000 new hires in the air transportation subsector picking up some of that slack.

All the other major business sectors in the country showed virtually no change in employment growth last month. This includes financial activities such as real estate, banking and insurance; mining, quarrying, and oil and gas extraction; wholesale trade; professional and business services; and the category known as other services.

Average hourly earnings increased by 12 cents per hour last month, to reach a new average of $34.10.  That is a 0.4% increase in wages since October.

This continues an ongoing wage increase pattern averaging 4.0% annually over the last twelve months.

Commentary

The trendlines for hiring set by this and the last several months are clear. The American economy has settled into a slow growth period which may prevent the country from dipping into a recession.

That is backed up by the news also released last week by the Federal government that the total number of job openings in the U.S. had fallen to 8.7 million, the lowest it has been since March 2021.

Hourly wages continue to rise at around a 4.0% annualized rate, but even that is just slightly above the average annual inflation rate of just 3.2% for the twelve months ending October 2023.

While all that is mostly good news assuming the data is accurate, the other data point to consider is that job growth has mostly stalled in everything but health care and in local and state government positions. The broader range of hiring in business sectors such as manufacturing, construction, information services, professional services, and more has flat-lined for now.

That makes this economy vulnerable, though for now just slightly, to what could happen if consumer confidence were to drop after the first of the year. That could be triggered by increased war spending on one hand or Congress growing even more paralyzed in authorizing routine spending in a pivotal election year.

High interest rates and continued consumer spending using credit are also concerns, since these mean an increasingly larger fraction of individual discretionary spending will be unavailable to buy goods and services, or to invest in housing.

For now, it is a time to watch and wait as the year ends and 2024 begins. But at least hiring in at least some sectors remains strong enough to keep business moving overall.

Chief Economist Julia Pollak at Zip Recruiter, a company which monitors the job market closely, summarized the situation well in comments released after the December 8 jobs report.

“The overall picture is one of a solid labor market that is slowing gradually, not falling off a cliff,” she said. “The breadth of job gains is all in health care and government. The rest of the economy has ground to a halt. That’s the effect of high interest rates.”