So much for that much anticipated rebound in the participation rate.
After it had managed to post a modest increase in the early part of the year, hitting the highest level in one year in March at 63%, the disenchantment with working has returned, and the labor force participation rate had flatlined for the next few month, ultimately dropping in November to 62.7%, just shy of its 35 year low of 62.4% hit last October. This can be seen in the surge of Americans who are no longer in the labor force, who spiked by 446,000 in November, hitting an all time high of 95.1 million.
As a result of this the US labor force shrank by 226,000 to 159,486K, down from 159,712K a month ago, and helped the unemployment rate tumble to 4.6%, the lowest level since August 2007.
Adding the number of unemployed workers to the people not in the labor force, there are now over 102.5 million Americans who are either unemployment or no longer looking for work.
While today’s headline jobs number was essentially Goldilocks, with the payrolls print missing the expected print of 180K by just 2,000 jobs, it was accompanied by a plunge in the unemployment rate to 9 year lows as a result of a jump in the number of people leaving the labor force, and rising to a new all time high of over 95 million. But while the quantitative headline aspect is open to interpretation, the qualitative component of the November jobs print was – just like in the case of October – quite clear: it was ugly, again.
Recall that in October, the Household Survey revealed that the number of full-time workers tumbled by 103,000 as part-time workers jumped by 90,000. The trend continued in November, when another 118,000 part-time jobs were added, paired with a far more modest 9,000 increase in full -time jobs.
The divergence is even uglier when looking at the non-seasonally adjusted jobs, i.e., real change: here we see a drop of 628,000 full-time jobs in November, offset by a surge in 678,000 part-time, mostly retail jobs.
Going back to the seasonally adjusted number, we find a troubling trend: as noted above, it was not just November: in the past three months, full-time jobs have declined by 99,000 while part-time jobs have surged by 638,000, which more than anything should explain the unexpected slide in the average hourly earnings, which as noted previously, dropped by -0.1%, the worst monthly change since 2014.
But perhaps even more troubling than the breakdown in November job quality, was another seldom-touted series: the number of Multiple jobholders, or people who are forced to hold more than one job due to insufficient wages or for other reasons. It was here that the red flashing light came on because while on a seasonally adjusted basis, the series rose once again by 61,000 to 7.8 million; when looked on an actual, unadjusted basis, the number of multiple jobholders increased again, rising by 57, and hitting 8,107 million, the highest number this century.
The again begs the question: how many of the 178K headline jobs “added” in November were double counted as a result of the ongoing rise in the number of multiple jobholders.
So yes: overall job growth continues to chug along – even if unconfirmed by the troubling drop in wages – if at a modestly disappointing pace at least in October, but the quality of the added jobs remains woeful.