Payroll report but now backward looking

November payrolls came in at 245k, well below the estimate of 460k. The two prior months were revised up by a combined 11k. It’s key to look at the private sector because the government shed 99k people after their temporary census work was complete. The private sector added 344k jobs vs the estimate of 540k.

After a big upside in October of 2.2mm, the household survey said 74k jobs were lost and joined with the 400k drop in the labor force, the unemployment rate actually ticked down to 6.7% from 6.9%. Thus, a drop for the wrong reasons. The all in U6 rate fell one tenth to 12%. The participation rate fell two tenths to 61.5% but the workweek was unchanged at 34.8. Average hourly earnings surprised to the upside with a .3% m/o/m and 4.4% y/o/y gains. Combine this with hours worked and average weekly earnings were higher by .3% m/o/m and 5.9% y/o/y. Keep in mind with these wages, the mix is helping the gains as the lower paying leisure/hospitality group is still under pressure and showed much slower hiring this month.

The average duration of unemployment rose again to 23.2 weeks, the highest since May 2019 from 21.2.

Both construction and manufacturing added 27k jobs and with manufacturing that is the least since April. Retail shed jobs and outside of government was the only area to lose them. Temp help hiring slowed after the jump last month. Leisure/hospitality hiring likely due to the Covid increase and selective shutdowns slowed to just 31k from 270k in October and 413k in September. As we’ve seen with e-commerce, the BLS said “notable job gains occurred in transportation and warehousing.” That said, this category saw job gains of 121k vs 161k last month.

Bottom line, we can analyze this data every which way but with the vaccine coming it all seems very backward looking. I’m guessing the market’s reaction with Treasury yields up, S&P futures up, everyone just assumes that this locks in another $1 Trillion of government spending, which it likely does. But, this is not stimulus, it is just more money, that for sure for some is needed, that is filling holes and buying time until Spring time.