The weak-but-not-disastrous November jobs picture
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Illustration: Aïda Amer/Axios
For all the headlines about an AI-driven jobpocalypse, the evidence from November points to a labor market that has been weak this autumn, but far from collapsing.
The big picture: Job growth looks to have flatlined in the second half of the year, and unemployment has inched up. But there are few signs of the kind of job loss surge or employment collapse that accompany a recession.
- Instead, it seems frozen in place.
- It is the kind of picture that amounts to a Rorschach test for Federal Reserve officials — offering ammunition to those who think the labor market demands immediate rate cuts and to those who think things are basically holding up, and that inflation should be the first-order concern.
By the numbers: ADP, the payroll processor, reported that private-sector employment fell by 32,000 jobs in November, fueled by losses at the smallest companies.
- The three-month average of that survey is -4,700 jobs — essentially flat in an economy with 160 million jobs.
- The Chicago Fed's real-time estimate of the unemployment rate, based on a mix of public and private data, was also essentially flat in the most recent reading, at 4.44%, down from 4.46% in October.
- The most recent official unemployment reading, from September, was 4.44%. Translation: Unemployment looks to have been steady this fall, albeit a notch higher than it was as recently as the spring.
Zoom in: The single least alarming real-time job market indicator is the weekly release of unemployment insurance claims data. Despite many large companies announcing layoffs, that has not so far translated into more people showing up at their local unemployment office for benefits.
- The moving average of those claims has been 215,000 over the last four weeks, which is actually lower than it was in the spring and summer.
Of note: The Bank of America Institute crunches customer data for an alternate measure of employment trends, and its November data, out Friday morning, tells the same story.
- Growth in payrolls slowed, now up only 0.2% year over year, from 0.5% the previous two months. But the rise in people receiving unemployment benefits was steady through the fall.
What they're saying: "Often at the start of a big recession, you will get a wave of job losses and a dip in job creation," David Tinsley, Bank of America senior economist, told Axios on a press call Friday morning. "And I think what the unemployment data is suggesting is really there's no great wave of job losses of that magnitude."
- Rather, the flatlining in payrolls evident across public and private sector data looks to be, in significant part, due to less labor supply amid restrictive immigration policy.
- "It's hard to be sure that there's no demand-side story, but there's an awful lot of supply-side story in this," Tinsley says.
The bottom line: The job market wasn't great this fall, but the bottom isn't falling out.
