BLS Analysis: 7% Unemployment Rate Lowest Since 2008

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For November 2013, the Bureau of Labor Statistics (BLS) Employment Situation Report indicated an unemployment rate decline from 7.3 to 7.0 percent and a rise of 203,000 in total nonfarm payroll employment. The overall number of unemployed persons declined to 10.9 million, which was partially attributed to furloughed federal employees (counted amongst the number of persons unemployed less than 5 weeks) returning to work in November after the government shutdown. Although the labor force participation rate (which takes into account those not looking for work) remained virtually unchanged at 63.0 percent, the employment-population ratio increased by 0.3 percentage point to 58.6 percent in November, reversing a decline of the same size in October. The 7.0 percent unemployment rate represents the lowest level since November 2008.

Mixed Signals in the Job Market

In its monthly National Employment Report, human capital management firm ADP stated that November was “the strongest month for job growth in 2013 – an encouraging sign as we head toward the new year.” Polls of economists indicated that November job growth exceeded their forecasts. September and October job gains were revised upward by 8,000, lending more strength to the BLS report. The report also included other positive factors: employment gains in virtually all sectors, an increase in average hourly earnings, and a lengthening of the workweek. Other analysts point to mixed signals in the labor market; while the unemployment rate is down, many of the new jobs are in lower paying sectors of the job market, and the number of people who gave up looking for work continues to outpace the number who found work. Still, full-time employment is up over the previous year, while the number reporting underemployment (those working part-time because they can’t find full-time work) has dropped.

Selected Employment Details

Gains occurred in health care (+28,000), transportation and warehousing (+31,000), and manufacturing (+27,000). The professional and business services sector also continued an upward trend by adding 35,000 jobs. Revisions of employment estimates rose slightly in the previous two months, with a net upward revision of 8,000 jobs (despite a slight downward revision in October).

The average workweek for all employees on private nonfarm payrolls increased to 34.5 hours in November, including a 0.1 hour increase in factory overtime to 3.5 hours, indicating employer confidence in the economic outlook.

Contingent Labor

Temporary labor employment continued to show gains through November and corrected a downward revision in September, an indication of underlying strength in the temporary help services sector.

Nov BLS 1

The seasonally adjusted temporary help services sector added another 16,400 jobs in November for a total of 219,000 more jobs than the same time last year.

Nov BLS 2

News Coverage

With signs of an improving labor market, analysts are focusing on the impact it will have on the Federal Reserve’s stimulus strategies but are still concerned that the statistics may still be showing signs of influence from the government shutdown in October.

News Source : BLS Analysis: 7% Unemployment Rate Lowest Since 2008

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