DE | Flash | Anytime | Jobs: +210K; 4.2% Unemployment Rate; Household Survey Very Positive – 12/03/21

Posted December 3, 2021 by rvillareal

Nonfarm Payrolls rose 210K in November (DE 605K, Consensus 550K) following a revised 546K gain in October (originally 531K). The Unemployment Rate dropped to 4.2% (DE 4.4%, Consensus 4.5%) from 4.6%.

The Labor Force Participation Rate (LFPR) improved to 61.8 (DE and Consensus 61.7%) from 61.6% with a 594K increase in the Labor Force. The Employment-Population Ratio rose to 59.2% from 58.8%.

Data – Much Softer Growth for Leisure and Hospitality

• Total Private Payrolls rose 235K after a revised 628K gain (originally 604K).
• Employment in the Goods Sector increased 60K from a 94K rise. Manufacturing and Construction each tallied growth of 31K. Mining and Logging saw a 2K fall.
• Private Services Employment grew 175K following a 534K increase.
• Professional and Business Services experienced a 90K increase after a 121K gain. Temporary Help rose 6K.
• Transportation and Warehousing showed a 50K gain from a 60K rise.
• Retail Trade faced a 20K fall after a 38K gain. Wholesale Trade saw an 8K rise after a 13K increase.
• Leisure and Hospitality Employment grew 23K following a 170K rise. Payrolls rose 11K for Food Services and Drinking Places and increased 7K for Accommodation.
• Education and Health Services experienced a 4K increase following a 59K rise.
• Government Employment fell 25K after an 82K drop. Local Government saw an 18K fall. Payrolls fell 9K at the State level and rose 2K for Federal.
• Average Weekly Hours went to 34.8 from 34.7. Average Hourly Earnings increased 0.3% (DE 0.5%, Consensus 0.4%) from a 0.4% gain and were up 4.8% YoY, the same as the revised figure from the prior month (originally 4.9% YoY).

Perspectives – Strong Household Survey Overrides Undershoot in Payroll Growth

Nonfarm Payrolls tallied solid growth in November, but considerably less than DE and Consensus forecasts.

Total Nonfarm Payrolls were down 2.6% from February 2020. Similarly, Leisure and Hospitality Payrolls were down 7.9% while Food Services and Drinking Places were down 6.1%. Payroll growth slowed substantially for Leisure and Hospitality.

The Household Survey was very positive and made the release strong overall, in DE’s view.

The Labor Force experienced substantial growth.

Household Employment jumped up 1.136M after a 359K gain, thus improving the Unemployment Rate drastically even with the larger Labor Force.

This continued Labor Market progress will give the Fed more leeway to focus on inflation.