Series: jobs
Brookings on Job Numbers

Positive News in the November Employment Report

Gary Burtless

In a very gloomy year for America’s job market, the November employment report is the best one we’ve seen in a long time. The big news is that the unemployment rate is down. Even though the drop is small, this is only the second month we have seen a drop in unemployment in the past year and a half.

In addition, the number of payroll jobs is essentially flat. This sounds bad, but it is a huge improvement over the situation a year ago when payrolls were tumbling more than 600,000 every month. Both the employer survey and the household survey agree in showing that layoffs in November were not as bad as they were in October. In general, while payroll employment continues to fall (slightly), the declines have been shrinking fairly steadily since late last winter.

The latest report contains evidence on at least three quite favorable developments. First, aggregate hours worked were up in November compared with the previous month. Even though the number of workers on company payrolls is essentially flat, employers are adding to the workweek so that total hours worked are rising. In fact, aggregate hours in the private sector are higher than they have been anytime in the past four months.

Second, the jump in the workweek translates into higher weekly pay. Average earnings in the private sector increased more than $10 per week—about 1½ percent—in November compared with October. The increase in worker income should encourage some households to loosen their purse strings, producing an increase in personal spending.

Finally, the temporary help services industry saw a healthy gain in payrolls in November, continuing a trend that has now lasted several months. Employers who are cautious about adding to their permanent payrolls sometimes take on temporary workers when their customers want more goods and services than their current staff can produce. This means rising employment in temporary help agencies can signal future growth in companies’ permanent payrolls. Based on past experience, the turnaround of employment in the temporary help services industry should usher in future employment growth in a wider cross-section of industries.