12.10.07
Economic Trends
The Employment Situation
Nonfarm payroll employment grew by 94,000 in November, just slightly below the forecasted gain of 100,000. This follows October’s strong job growth of 170,000, revised up from 166,000. However, gains for September were revised down by more than half to 44,000. After these revisions, the average monthly increase in employment stands about 118,000 for 2007, significantly lower than the past three years. The average monthly employment gain in the third quarter now stands at 77,000, which is the lowest since the third quarter of 2003. The unemployment rate remained unchanged from the previous two months, at 4.7 percent.
Service-providing industries continued to drive growth, adding 127,000 jobs during the month on strong, broad-based gains, with the exception of a 20,000 loss in financial services. This fourth consecutive monthly loss for financial services was largely due to cuts in credit intermediation (−13,000) and real estate, rental, and leasing (−10,800). Professional business services remained solid, as did leisure and hospitality and the government sector, which added 26,000 and 30,000 to their payrolls, respectively.
Goods-producing industries were a dark spot in the report, losing 33,000 jobs. Nondurable goods manufacturers (−10,000) and specialty trade contractors (−11,000) bore most of the hardship within this category. Overall, the construction industry lost 24,000 jobs. Jobs in residential construction fell by 20,000, reflecting a sharp decline in the housing sector.
November’s gain in overall employment reflected a 30,000 increase in government payrolls and a 64,000 increase in private payrolls. The heaviest gains in government were at the local level (19,000), and the sector as a whole has contributed positively to growth over the year, with the exceptions of June (−2,000) and July (−24,000).
Professional and business services made a hefty contribution of 30,000 jobs during the month, led largely by professional and technical services (23,900) and computer systems design (11,900). Leisure and hospitality also added an impressive 26,000 to its payrolls, despite pressures on consumers. This sector was led almost exclusively by food services and accommodation, which experienced 27,800 in payroll gains. Also notable was the 24,000 increase in retail payrolls, which more than offset the past three-month decline.
Labor Market Conditions
|
Average monthly change
(thousands of employees, NAICS) |
||||||||
|
2004
|
2005
|
2006
|
2007
YTD |
November
2007 |
||||
|
Payroll employment |
172
|
212
|
189
|
118
|
94
|
|||
|
Goods-producing |
28
|
32
|
9
|
−24
|
−33
|
|||
|
Construction |
26
|
35
|
11
|
−11
|
−24
|
|||
|
Heavy and civil engineering |
2
|
4
|
2
|
−1
|
−5
|
|||
|
Residentiala |
9
|
11
|
−2
|
−7
|
−20
|
|||
|
Nonresidentialb |
3
|
4
|
6
|
2
|
1
|
|||
|
Manufacturing |
0
|
−7
|
−7
|
−16
|
−11
|
|||
|
Durable goods |
8
|
2
|
0
|
−11
|
−1
|
|||
|
Nondurable goods |
−9
|
−9
|
−6
|
−5
|
−10
|
|||
|
Service-providing |
144
|
180
|
179
|
142
|
127
|
|||
|
Retail trade |
16
|
19
|
−3
|
6
|
24
|
|||
|
Financial activitiesc |
8
|
14
|
16
|
−2
|
−20
|
|||
|
PBSd |
38
|
57
|
42
|
23
|
30
|
|||
|
Temporary help svcs. |
11
|
18
|
−1
|
−4
|
11
|
|||
|
Education and health svcs. |
33
|
36
|
41
|
47
|
28
|
|||
|
Leisure and hospitality |
25
|
23
|
38
|
30
|
26
|
|||
|
Government |
14
|
14
|
20
|
21
|
30
|
|||
|
Local educational svcs. |
8
|
6
|
11
|
7
|
10
|
|||
|
Average for period (percent)
|
||||||||
|
Civilian unemployment rate |
5.5
|
5.1
|
4.6
|
4.6
|
4.7
|
|||
a. Includes construction of residential buildings and residential specialty trade contractors.
b. Includes construction of nonresidential buildings and nonresidential specialty trade contractors.
c. Financial activities include the finance, insurance, and real estate sector and the rental and leasing sector.
d. PBS is professional business services (professional, scientific, and technical services, management of companies and enterprises, administrative and support, and waste management and remediation services.
Source: Bureau of Labor Statistics.
Overall, this month’s report suggests that the economy is still creating jobs at a moderate pace. However, it is worth noting that monthly numbers are volatile and subject to revision. In last month’s report, for instance, the Bureau of Labor Statistics revised September payrolls down by 14,000, lowering that estimate to a gain of 96,000. The current report made even more dramatic revisions, reducing the earlier figure by 52,000 and resulting in September gains of 44,000. Payroll gains in October and November are subject to revision in the next report.
