Payrolls Rise 211K, Unemployment Steady at 5%

Payroll growth is solid and, though wages aren't building steam, today's employment report fully cements expectations for December liftoff. Nonfarm payrolls rose a very solid 211,000 in November which is safely above expectations for 190,000. And there's 35,000 in upward revisions to the two prior months with October now standing at a very impressive 298,000. The unemployment rate is steady and low at 5.0 percent with the participation rate less depressed, up 1 tenth to 62.5 percent.

But earnings data are not impressive, up a monthly 0.2 percent vs October's outsized 0.4 percent gain. And the year-on-year rate for average hourly earnings is down 2 tenths to 2.3 percent.

Payroll data show a 46,000 jump in construction where activity right now is very strong. This follows construction gains of 34,000 and 19,000 in the two prior months. Trade & transportation, reflecting activity in the supply chain, is also very strong with November and October gains of 49,000 and 46,000. Payrolls are also on the rise in retail trade, up 31,000 and 41,000 the last two months to indicate that retailers are gearing up aggressively for this holiday season. One negative, however, is a 12,000 dip in temporary help services which nearly cuts in half the prior month's 28,000 gain. Demand for temporary services is considered a leading indicator for permanent hiring.

And weekly hours slipped in the month, down 1 tenth to 34.5 hours. Data on manufacturing are flat and point to little change for November production. And one negative in the report is a 1 tenth uptick to 9.9 percent for the broadly defined U-6 unemployment rate which had, however, dropped sharply in the prior months.

Despite soft spots and though earnings are flat, this report confirms that the nation's labor market is solid and growing and, for the Fed, it supports arguments for the beginning of policy normalization.

Recent History Of This Indicator:
Nonfarm payrolls are expected to rise 190,000 in November, the same consensus for the October report which proved very much stronger at 271,000. A consensus result, and even a result at the 160,000 low end of the estimate range, would be more than enough to cement expectations for a rate hike at the mid-month FOMC. The unemployment rate, which slipped 1 tenth in the prior month, is expected to hold steady at a very low 5.0 percent. Average hourly earnings, which jumped 0.4 percent in October, are expected to slow but still show some pressure, at plus 0.2 percent.