U.S. Jobs: November Numbers Foretell a Soft Landing?

Look quickly at the U.S. job market and you may see something seldom encountered at any time, under any circumstances. For the November results we’re in a fascinating situation:

‍

1) With 199,000 jobs added for the month, the overall jobs report is pretty strong — but neither too strong nor too weak.

2) Unemployment took a slight dip, from 3.8 percent to 3.7 percent. This is mostly thanks to the UAW and SAG/AFTRA workers returning to their jobs.

3) The 12-month trailing inflation average dropped from 3.7 percent in September to 3.2 percent in October (that’s the most recent number).

‍

It’s about as good as such news gets these days, simply because the Fed wants to keep employment up, wages flat, and inflation moving downward. Right now, illusory or factual, things look surprisingly just like that! It can’t possibly last, so enjoy it while you can.

‍

The latest three-month numbers were also interesting, in a good way. September was marked down from 297,000 to 262,000 (-35,000) while October remained unchanged at 150,000. That puts the three-month trailing average at almost 204,000, right on the 200,000 spot that economists like to see. Apparently, numbers in this range (195,000 to 205,000) indicate healthy, but not overly strong, job growth. Good-oh!

‍

The November 2023 Jobs Report

‍

The just-under-200,000 jobs added for November (199,000 to be precise) falls in something of a sweet spot for job growth. It’s not low enough to indicate that the Fed is braking too hard, but it’s not high enough to fuel fears of a wage-price spiral, either.

‍

And with about 30,000 jobs coming back into play as the UAW strike ended, and another 17,000 jobs likewise from SAG/AFTRA (actors), that bumps numbers into a safe zone of sorts. Just FYI, 3.7 percent unemployment translates into 6.3 million unemployed persons (and sizes the total workforce at about  170 million participants).

‍

Digging deeper into the November numbers, we see the following highlights and items of interest:

‍

Healthcare came in the big winner, with 77,000 jobs added (about 30 percent higher than the trailing 12-month average of 54,000 jobs). Of that glossy total, 36,000 represented ambulatory health care services, 24,000 went to hospitals, and 17,000 were added at nursing and residential care facilities.

Government posted a rarely seen second-place finish, with 59,000 jobs added (still more or less on par with its own 55,000 trailing 12-month average). Of those jobs added, 32,000 were in local government, and another 17,000 in state government.

Manufacturing placed to show with 28,000 jobs. Of those, 30,000 were UAW workers returning from strike. Otherwise, manufacturing employment is mostly flat for 2023.

Leisure and hospitality managed fourth place, with 40,000 jobs as it continues to fight its way back to prepandemic parity. November’s results still came in about 15 percent below the 12-month trailing average of 51,000 in this sector.

Social assistance hit the fifth rung, with 16,000 jobs added (about one-third below its 12-month trailing average of 23,000 jobs). Individual and family services posted the biggest gain, with 9,000 jobs in that sub-sector here.

Retail trade employment — on a strikingly sour note — dropped 38,000 jobs (unusual with the holiday shopping season coming on). Alas, this sector has also been flat for 2023 as well. Losses came in from department stores (-19,000 jobs), as well as furniture, home furnishings, electronics and appliance outlets (-6,000 jobs). Ouch!

‍

Other sectors on which the U.S. BLS reports were all mostly flat, including mining, oil and gas, construction, wholesale trade, financial activities, information, transportation and warehousing, professional and business services, and other services.

‍

CompTIA Has a Rosier View of IT (Information)

‍

The latest IT employment press release from tech industry association CompTIA takes a more detailed and nuanced look at information related employment. CompTIA’s latest estimate of total tech sector employment comes in a 5.6 million, and includes workers from companies engaged in technology infrastructure, telecommunications, software and services.

‍

While things are indeed mostly flat, CompTIA sees encouraging signs of activity in tech services and software development, with 2,900 new jobs in November (and 11 straight months of growth, however modest, in this niche). Cloud infrastructure shows seven months of positive hiring.

‍

The other side of this street is what CompTIA calls tech occupations (workers who handle IT or related roles in non-IT-focused companies and organizations of all kinds). This turns into a case of declines: one good, one bad. The bad decline here is that this sector shrunk by 210,000 jobs in November.

‍

On the plus side, it’s 1.7 percent unemployment rate is less than half the overall national rate of 3.7 percent. This puts IT overall into something of a holding pattern, with glimmers of positivity and activity in services and software development, and a somewhat grimmer status quo in tech occupation positions.

‍

Overall, the News Is Good (if Muted)

‍

Methinks the levels of growth are both sustainable and positive enough to keep the Fed, markets, and the workforce relatively happy. Right now, in the wake of this latest report, all the indices are up, and reporting is uniformly upbeat (if not wildly enthusiastic). We can probably look for a quieter-than-usual closing for 2023.

‍

As the world holds its breath to see what 2024 will bring, that’s probably no bad thing.