The Magic Drop in Unemployment

The U.S. Labor Department has reported on November unemployment and non-farm payrolls this morning on the heels of a weak jobless claims figure yesterday.  Non-Farm Payrolls grew by 120,000 for November, in between the recent estimates.  The big change was in the reported unemployment rate.  That came in at 8.6% and the October unemployment was unchanged at 9.0%.

Bloomberg was expecting non-Farm Payrolls to come in at 131,000, up from 116,000 earlier this week and versus a prior reading in October of 80,000 and against a range of 90,000 to 175,000.  The November Unemployment Rate is expected to come in at 9.0%, which would be the same as it was in October.

Yesterday’s jobless claims rose to 402,000 versus a Bloomberg consensus estimate of 393,000 and the range from economists was 385,000 to 405,000; the previous week was revised to 396,000 from a preliminary figure of 393,000.

If you just counted the private companies and eliminated the government losses, the private sector actually added 140,000 jobs.  There were also some slight revisions higher to prior non-farm payrolls.

Some will wonder if the 8.6% unemployment rate is a fudged number.  The workforce declined by more than 300,000 and he officially unemployed people magically dropped by about 600,000.  That 8.6% reading is the lowest since March 2009. There was also a slight drop in the labor participation rate to 64%.

The growth came as 22,000 jobs in leisure and hospitality, there were 33,000 added in professional and business services; and 17,000 were added in healthcare.

JON C. OGG