Monthly US Employment Analysis - November 2019

November 2019 Monthly US Employment Analysis

Edward Leamer, Professor Emeritus, UCLA Anderson School
December 6, 2019

The November payroll release of 266,000 jobs is much greater than last month’s figure of 156,000, which was revised upward from 128,000. But it is difficult to discern the real meaning of that big increase because the payroll data have some extreme ups and downs, with a big increase followed in the next month by a corrective big decrease.

The real news in these releases can be captured by two smoothed series, one based on just the overall payroll data and another one that includes the components of the payroll data like nondurable manufacturing. The actual and the smoothed versions are illustrated in the figure below.

THE NEWS: The smoothed series show little change from last month’s data. In the smoothed series, the latest data confirm that the jobs situation has completely recovered from a weakening in the summer, from May to August. We are now firmly back to payroll increases above 200,000, as we were experiencing a year ago, which is substantially above the 160,000 numbers during the summer.

Figure 1

The GM strike: Another way to filter the data

Another way to do the filtering is to take out one-time reversible swings like the GM strike. Durable manufacturing jobs fell from 50,000 in October but recovered 46,000 in November. If we add 50 to the October total and subtract 46 from November we get the sequence 193, 206, 220. That’s very close to the filtered series.

Figure 2

UCLA Anderson Forecast