Payrolls remain “essentially unchanged”. The Bureau of Labor Statistics (BLS) reported that the number of total nonfarm jobs declined by 11,000 in November, leaving employment essentially unchanged over the month. November’s decline was the lowest monthly decrease since December 2007.  Nonfarm payroll employment excludes self-employed workers and workers in the agricultural sector.  After reaching a peak of 741,000 jobs lost in January, the rate of job loss has steadily fallen. (See Chart) November’s employment report showed job creation in healthcare (21,000), temporary help services (52,000), and the service sector (58,000).  Temporary help is considered a leading indicator of job creation in the economy because many employers start by hiring temporary workers before hiring new permanent staff.  Since July, temporary help services employment has risen by 117,000.   The increases in these sectors were offset by declines in construction (-27,000) and manufacturing (-41,000). Manufacturing job losses have remained fairly constant since July, albeit at a much more moderated pace than the peak job losses seen in January of 2009 when employers shed 262,000 manufacturing jobs. The rise in the manufacturing workweek (up 0.3 hours to 40.4 hours) and increase in factory overtime (up 0.1 hour to 3.4 hours) are consistent with future employment gains in this sector.  The number of jobs lost in September and October were revised sharply downward from 219,000 to 139,000 and from 190,000 to 111,000 respectively.   While the stabilization of job losses was much better news than expected, during the Clinton expansion, an average of 200,000 jobs were created each month.  With 7.2 million jobs lost, it will take three years of a Clinton-era expansion to recreate the number of jobs lost during this recession.  

The unemployment rate declines. BLS announced that the unemployment rate declined by 0.2 percentage points to 10.0 percent in November. This is the first time since July that the unemployment rate fell and the fourth monthly decline since the recession began. Over the past 12 months the unemployment rate has increased 3.2 percentage points. An alternative measure of unemployment which includes those marginally attached to the labor force and those working part-time for economic reasons fell 0.3 percentage points to 17.2 percent. The decline in the unemployment rate was largely due to a decline in the number of job losers (the total number of re-entrants and new entrants to the labor force fell by 43,000 people this month).  However, the median duration of unemployment is now at 20.1 weeks and the long-term unemployed make up 3.8 percent of the labor force, exceeding last month’s series high.
 
Productivity increases due to rise in manufacturing. The BLS reported that nonfarm labor productivity increased by 8.1 percent (at an annual rate) in the third quarter of 2009. This was the largest gain in productivity since 2003. The rise in productivity largely reflects a 13.4 percent increase in manufacturing, the largest on record. Labor productivity also rose in the first and second quarter of 2009.  Given that real average hourly earnings have fallen since January 2009, it is no surprise that companies’ profits (and the stock market) have risen since January.