Job creation surged in November according to the employment report issued by the Labor Department, as total nonfarm payroll employment increased by an impressive 321,000, and the unemployment rate held steady at 5.8 percent. The report far exceeded economists’ expectation of 230,000 new nonfarm payroll jobs. Additionally, the Labor Department revised the September and October nonfarm payroll numbers higher to 271,000 and 243,000 respectively.
Job gains were led by the professional and business services, retail trade, healthcare and manufacturing sectors. Professional and business services added 86,000 new jobs in November, compared with an average gain of 57,000 per month over the prior 12 months. Within the sector, accounting and bookkeeping services added 16,000 jobs while employment in temporary help services continued to trend upward gaining 23,000 in November.
Healthcare added 29,000 jobs last month, including 7,000 new physicians, 5,000 positions in home healthcare services and 4,000 jobs within hospitals. Over the last year, healthcare employment has increased by a total of 261,000 jobs.
November proved to be another strong month for manufacturing as the industry added 28,000 jobs, largely led by durable goods manufacturers, which accounted for 17,000 of the increase. Over the last 12 months, manufacturing has added a total of 171,000 jobs, largely in durable goods.
Wages Are the Shining Star in November Employment Report
Economists have been waiting to see positive movement where it really matters to American workers – in their wallets. The November employment report delivered the much anticipated news of wage increase, showing the biggest gain in average hourly earnings since June 2013. Hourly earnings rose by 0.4 percent in November, double what economists were expecting and much higher than both October’s small 0.1 percent increase and the unchanged number in September.
At the same time, the number of hours worked increased by one-tenth, a trend that added to workers’ take home pay. With the holiday shopping season underway, the rise in wage growth and number of hours worked plus plunging gasoline prices are all good news for consumers and retailers.
Retail Jobs on the Rise, but Retail Sales Questionable
The stage is set for promising holiday shopping sales with gas prices at multiyear lows, very healthy job gains and recent wage growth. In anticipation of a strong holiday shopping season, retailers have added more workers in recent months. Employment in retail trade rose by 50,000 in November, compared with an average monthly gain of 22,000 over the prior 12 months. Clothing and accessory stores added 11,000 new positions, while sporting goods, hobby, book and music stores gained 9,000 new roles. Employment at nonstore retailers increased by 6,000 jobs.
Investors will be watching closely when November retail sales data is released by the Commerce Department this week. Some reports speculate that Thanksgiving holiday sales fell 11 percent from a year earlier to $50.9 billion, but many analysts have disputed that figure. However, given that households could save as much as $1,100 annually if current gas prices hold steady, a continuation of lackluster retail sales could draw concern. Economists surveyed by MarketWatch expect a consensus of 0.2 percent growth.
Demand for Workers Rising, Supply Becoming Greater Challenge
The economy has now added at least 200,000 jobs for 10 consecutive months, the longest uninterrupted stretch at that level in more than 30 years. Meanwhile, the United States has created 2.65 million new jobs this year, the largest increase since a 3.2 million gain in 1999. It is clear: companies are looking for employees.
However, many employers struggle to fill open positions quickly, or even at all, and this challenge costs them money. In fact, research conducted by the Centre for Economic and Business Research and the job site Indeed.com shows that delayed hiring costs employers nearly $160 billion a year. The report also found one-in-three open positions now remains unfilled for longer than three months – a number that’s risen in recent months. According to the report, manufacturing exemplifies an industry where jobs remain open for longer than average, with 38.4 percent of available jobs remaining open for longer than three months.
Temporary Help Services Important to Solving Hiring Challenges
As employers continue to seek out skilled talent to fill growing numbers of job openings, they continue to rely on temporary help providers to find sought-after workers and maintain flexible workforce structures. The temporary help services sector was up 22,700 jobs in November and totaled more than 2.9 million. In November the temporary help sector showed year-on-year growth of 8.5 percent.
The temp industry’s market share – its portion of all jobs – continued to rise and reached an all-time high of 2.12 percent in November, compared to 2.11 percent in October and 2.0 percent 12 months ago in November 2013. Also, between August and November this year, temporary help providers hired 219,000 workers, compared to 203,000 in 2013 and 147,000 in 2014.
Employee and Consumer Confidence Mixed
Randstad’s November Employee Confidence Index, which tracks workers’ monthly perspectives around jobs and the economy, rose for the third consecutive month. The Index increased 0.5 points to 58.7 from 58.2 in October. Employees’ confidence in the availability of jobs was little changed, but confidence in their ability to find a new job continued to rise. For example, three-in-ten employees (29 percent) expressed increased confidence in the availability of jobs, while 51 percent of workers were confident in their ability to find a job. Not surprising, the November report revealed that 37 percent of employees said it was likely they would look for a new job, a three percentage point increase from the October report.
Meanwhile, the Conference Board’s Consumer Confidence Index declined in November to 88.7 after rebounding in October to 94.1. According to the Conference Board, consumer confidence retreated in November primarily due to reduced optimism in the short-term outlook. Consumers were somewhat less positive about current business conditions and the present state of the job market.