The first Friday of every month, the payroll report dominates the news and today was no exception.
In November, U.S. businesses added 147,000 jobs while the public sector cut 1,000 positions. The 146,000 headline figure was significantly higher than the 80,000 consensus estimate. Meanwhile, the unemployment rate edged down from 7.9% in October to 7.7% in November. However, the average workweek remained unchanged at only 34.4 hours.
This report was interesting on several fronts:
- While economists were expecting Hurricane Sandy to disrupt payrolls, the data didn’t reflect any major effect on employment in the Northeast. This is at direct odds with the recent ADP payroll report, which estimated that Sandy was responsible for 86,000 lost jobs.
- And while the unemployment rate did fall, the downward pressure was caused by the fact that 350,000 people dropped out of the workforce in November.
- Finally, the unusually low workweek suggests that some employers are trying to keep worker hours under 30 per week, so they do not have to provide health insurance under ObamaCare.
So while the headline figures were pretty strong, the details weren’t quite as clear about the state of the jobs market. It’s obvious that a lot hinges on whether a debt deal is worked out by the end of the month, so once we get over that hurdle, I’ll be interested to see how the December and January payroll reports pan out.
Over the past two years, we have seen spikes in private payrolls around the beginning of each year—I’m rooting for seeing this trend continue because a strong payroll report is exactly what the markets need after the fiscal cliff drama.