U.S. Jobs: Unemployment Still Low, Job Growth Slowing

It's that time of the month again, and this time the U.S. Bureau of Labor Statistics delivers another delightful conundrum in its Employment Situation Summary for November 2018. The jobs created number is down to 155,000 from October's 237,000 (itself revised downward from its prior level of 250,000 in the prior jobs report).

With the somewhat dismal numbers for September now revised upward to 119,000, that puts average job creation for the past quarter at 170,000 jobs per month. In 2017, average monthly job growth was 182,000. For the 13-month period from November 2017 to November 2018, the average stands at nearly 188,000.

Thus, things are going just a little bit better — though not dramatically so — than last year. By contrast, average monthly job growth for 2016 was 195,000.

What About Wage Growth?

Given that the unemployment rate remains locked at a hear-historic low of 3.7 percent for yet another month (the third in a row), it looks like the balance of power is tilting ever so slowly toward workers rather than employers. For November, average hourly earnings rose by $0.06 to $27.35. Over the past 12 months, wages are up by $0.81 per hour, or 3.1 percent.

According to the U.S. Inflation Rate Calculator, October's inflation rate (the most current number available) was 2.5 percent. That puts the November wage growth nicely but not seriously ahead of inflation (0.6 percent). Nevertheless, consumer confidence also declined in November, down by 2.2 points to 135.7, which The Conference Board Senior Director Lynn Franco describes as "remain[ing] at historically strong levels."

Where Jobs Grew in November

A closer look at the November jobs report shows some evergreen sectors of the economy accounted for much of its reported job growth. Healthcare leads the way with 32,000 jobs added (19,000 jobs in ambulatory healthcare services, 13,000 jobs in hospitals). That give us 328,000 jobs over the year, for a monthly average of 27,000 jobs.

The other evergreen sector is professional and business services, which also added 32,000 jobs this past month. Over the past year, it has seen 561,000 jobs added, for a monthly average of nearly 47,000 jobs.

Other sectors less often on the leading edge also added jobs as well. That includes manufacturing, up by 27,000 jobs for the month, and 288,000 jobs over the past year, for a monthly average of 24,000 jobs. Transportation and warehousing added 25,000 jobs in November, with 192,000 jobs for the past year (monthly average 16,000 jobs).

Retail trade employment grew by 18,000 jobs, in line with typical seasonal hiring for the holiday shopping season. Over the past year, it's been all over the place. Remaining sectors showed little or no change, including mining, construction, wholesale trade, information, financial activities, leisure and hospitality and government.

CompTIA's Take on IT Employment

This morning, CompTIA released its monthly press release along with its Employment Tracker infographic. It reports 13,500 IT jobs added for November, which it characterizes as "another strong month for employment growth."

This growth occurred in new hiring for IT services, custom software development, and computer system design. The jobs added number is nearly double that for October, which CompTIA reported at 7,600 jobs that month. The trade association also cite's the USBLS Summary tables unemployment in IT occupations at 2.4 percent, which compares favorably with the 2.5 percent rate reported for November 2016.

A quick look at the infographic shows total IT occupation employment (people working in IT jobs outside the IT sector of the economy) at 5.2 million jobs, with IT sector employment (people working for IT focused companies and organizations) at just under 4.6 million, for total IT employment of just under 9.8 million for the overall economy. That's about as high as it's been over the past two years and more.

Where to next?

Given the whipsaw behavior of major financial markets of late (all major indices are down by 8-plus percent from their Oct. 1 high for the year), and continued fear and uncertainty in the face of the tariff situation between the U.S. and China, I'm expecting employment to contract along with the rest of economy.

This is one case where I'd dearly love to be wrong, but the markets hate uncertainty more than just about anything else. Given the recent pullback in equities, I'm expecting this to have a cooling effect on growth across the board, including jobs. The full extent probably won't make itself known until 2019 gets underway, so December's results should be interesting, to say the least.

Will the year end with a bang, or a whimper? This time around, I'm leaning toward the whimper. We'll see how it goes, though.