U.S. Jobs: Modest Growth, Low Unemployment, Steady as She Goes

For the third month in a row, the U.S. Bureau of Labor Statistics has reported modest, steady, and continuing job growth in a range from 263,000 (November) to 284,000 (October). These are not stellar nor even big numbers — but they keep going, they show continued growth, and they strike what can only be called a "nice balance" between too much and not enough.

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At the same time, wages are showing a healthier increase: 5.1 percent over the trailing 12-month period, versus inflation still running higher than 7 percent. Things seems to be moving toward balance and measure rather than toward crash or chaos. This is good, good, good, especially in light of widespread dread of an impending recession and/or runaway inflation.

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Jerome Powell has even announced the Fed’s intention to slack off on the size of upcoming rate hikes, as another indication that economic factors may be converging on some kind of steady and tolerable state. All I can say is: "What a relief!"

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What’s in the November 2022 Report?

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As already mentioned, 10 of the 13 sectors that the U.S. BLS tracks showed some level of growth. Those sectors include:

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Leisure and hospitality added 88,000 jobs, of which 62,000 went to food services and drinking places. That is slightly better than the year-to-date average for this sector of 82,000 jobs per month. This sector is one of a few that has not yet rebounded to pre-pandemic levels, but is now fewer than 1 million jobs down from February 2020, at -980,000 jobs (-5.8 percent).

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Healthcare services grew by 45,000 jobs, of which 23,000 went to ambulatory health care, 11,000 to hospitals, and another 10,000 to nursing and residential care facilities. Again, this tracks nicely with the year-to-date monthly average of 47,000 jobs in 2022, far greater than the 2021 monthly average of 9,000 jobs.

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Government gained 42,000 jobs, mostly at the local government level (+32,000 jobs). That beats the year-to-date monthly average of 25,000 jobs, but is lower than the 32,000 monthly jobs added in 2021.

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The other services industry tallied up an additional 24,000 jobs, of which personal and laundry services accounted for 11,000 jobs. Year-to-date monthly jobs added number for 2022 is 15,000, somewhat lower than the 24,000 average for 2021. It too, is slightly below pre-pandemic levels (-186,000 or -3.1 percent).

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Social assistance added 23,000 jobs, and is now at parity with February 2020 levels. Of that 23,000 number, 17,000 went to individual and family services jobs. The year-to-date monthly average in this sector is 18,000 (13,000 for 2021) so this, too, is on track with current trends.

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Construction grew by 20,000 jobs, of which nonresidential construction contributed 8,000 jobs. The year-to-date monthly average for 2022 in this sector is 19,000 jobs (fairly close to, but slightly higher than the 16,000 number for 2021).

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Information (the IT industry home sector) gained 19,000 jobs, slightly better than the year-to-date monthly average of 14,000 jobs for 2022, and slightly lower than the 2021 monthly average of 16,000 jobs.

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Manufacturing tallied up 14,000 jobs for the month, down from the year-to-date monthly average of 34,000 jobs for 2022, and the 30,000 monthly average for 2021.

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Financial activities had a bump of 14,000 jobs, most of which went to real estate rental and leasing (+13,000); and securities, commodity contracts and investments (+6,000); with a loss of 6,000 jobs in credit card intermediation. This sector’s year-to-date monthly average is +12,000 jobs, the same as for 2021.

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Professional and business services added a slender 6,000 jobs, with the professional and technical services tally of 28,000 jobs added cut back by a business support services loss of 11,000 jobs. Year-to-date, the monthly jobs added average for 2022 in this sector is 58,000 jobs. Compare that to 94,000 monthly jobs as the 2021 average.

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Down sectors include:

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Retail trade lost 30,000 jobs in November, with drops of -32,000 for general merchandise stores, -4,000 in electronics and appliance stores, and -3,000 in furniture and home furnishings stores mitigated somewhat by a gain +10,000 jobs at motor vehicle and parts dealers. Retail trade employment is down by 62,000 since August. It’s unusual to see this sector dip at the outset of the holiday shopping season.

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Transportation and warehousing dropped 15,000 jobs. It’s down by 38,000 jobs since July. Many sources attribute this to the drop-off in online shopping activity now that more people are shopping in stores in person. Of those losses, 13,000 hit warehousing and storage, and another 12,000 did likewise for couriers and messenger. A gain of 4,000 in air transportation helped to soften the total.

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Flat sectors comprise the only two left over in those that the BLS tracks: mining and wholesale trade.

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Hourly wages continue to climb, albeit at a less aggressive pace than inflation. For November average hourly earnings on private nonfarm payrolls grew by 18 cents (0.6 percent) to $32.82. In the past 12-month-period wages are up by 5.1 percent. Inflation, by contrast, just finally dipped a bit to 7.7 percent (the first time it’s been under 8 percent for the past several months).

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How to Read These Tea Leaves

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I’m in agreement with NPR and the financial press on the import of the latest results. There’s no doubt that the economy is cooling, but it seems to be doing so slowly and surely. Economists also agree that if the United States is going into recession, it hasn’t yet started to decline sufficiently to qualify for that formal definition (two successive quarters of shrinking GDP).

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Taken together, everything that's going on seems to represent a textbook definition of a soft landing. That is a contraction of the economy to gentle and modest (but still continuing) growth as inflation continues to subside. Let’s hope that things keep on keeping on. Right now, that seems like the best possible outcome. And if current trends continue, that actually might be what happens. Good oh!