Today’s jobs report shows the economy added 263,000 jobs in November, for an average monthly gain of 272,000 over the past three months. The number of jobs added in November came in well above market expectations. Employment growth in September and October was revised down by a combined 23,000 jobs.
The unemployment rate held steady at 3.7 percent. Labor force participation ticked down to 62.1 percent. Nominal wages rose by 0.6 percent in November and have risen by 5.1 percent over the last year.
1. Average monthly job growth over the last three months was 272,000, well above expectations but a substantial slowdown from average job growth at the end of 2021.
Job growth in September, October, and November averaged 272,000 jobs per month (Figure 1). Since monthly numbers can be volatile and subject to revision, the Council of Economic Advisers prefers to focus on the three-month average rather than the data in a single month, as described in a prior CEA blog.
2. Monthly nominal wage growth accelerated in November and previous months of wage growth were revised higher.
Nominal average hourly earnings growth accelerated to 0.6 percent over the month, an elevated pace relative to pre-pandemic. In addition, wages in past months were revised higher, suggesting that wage growth is not yet moderating (Figure 2). Year-over-year, nominal wage growth also accelerated, to 5.1 percent. We do not have the inflation report for November yet, which will include real wage growth.
3. Labor force participation rates for workers ages 16 and over and prime-age (25 to 54) workers ticked down.
Labor force participation for workers ages 16 and over ticked down to 62.1 percent. Participation for prime-age workers also ticked down, although both measures have seen substantial recovery from their pandemic lows. Overall, the growth in labor force participation has been relatively robust in this recovery compared to past recoveries.
Both overall and prime-age labor force participation have largely held steady in recent months. Growth in overall labor force participation faces headwinds from the aging of the population, which is why many economists prefer to focus on the prime-age participation rate.
4. The unemployment rate held steady at 3.7 percent, a still low rate. The broadest measure of underemployment ticked back down to its series low.
The unemployment rate held steady at 3.7 percent and has remained around the same low rate since March 2022. The broadest measure of underemployment, which includes workers who are out of the labor force but would take a job if offered and workers who are working part-time but would prefer full-time work, ticked back down to its series low. It has remained around the same low rate since June 2022.
5. The long-term unemployment rate has ticked up, but remains low.
In November, the long-term unemployment rate was 0.7 percent. Long-term unemployment has edged up slightly in recent months, but remains near its pre-pandemic level.
As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, and it is informative to consider each report in the context of other data as they become available.