Employment drop ominous?

The November U.S. employment report was considerably weaker than that for October.

While the drop in employment according to the household survey was smaller than in October, with a job loss of 173,000 compared to 330,000, the fact that employment according to that survey continues to drop is ominous.

The employment to population ratio therefore fell to 58.2% in November, matching the previous low reached in December last year. Unlike the previous month, the drop wasn't concealed by a drop in the participation rate, and the unemployment rate rose from 9.6% to 9.8%.

The only strong part of the household survey was that part-time unemployment (aka underemployment) fell from 5.9% to 5.7%, and as a result the broader unemployment rate that includes the part-time unemployed and discouraged job seekers was unchanged at 17%.

The payroll survey was considerably weaker in all aspects compared to the report for October. Payroll employment rose only 39,000 compared to 172,000 in October. Unlike in October, the average work week didn't increase and average hourly earnings rose only 1 cent (0.04%) in November compared to 6 cents (0.27%) the previous month.

In the previous report, the household and payroll surveys contradicted each other with the former showing weakness and the latter showing strenth. Now both show weakness, though the household survey is again weaker.

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