–Adult Males Drop Out; Earnings Up, Hours Dip: Income Rising

By Joseph Plocek

WASHINGTON (MNI) – The U.S. November employment report masks
weakness and indicates an economy that is still growing at a too slow
pace to create jobs.

The November employment metrics were mixed, with payrolls up
120,000, about average for recent months, but upward revisions to
October and September totaling +72,000. The revisions were only about
2/3 of the recent advance. Moreover, many of the jobs recently created
were in ‘weak sectors’ such as leisure and restaurants.

There was a massive attention-grabbing 0.4 point drop in the
overall civilian unemployment rate to 8.6%. That was its biggest drop
since a similar 0.4 point decline in December 2010.

However, the labor force size (both before and after adjustment)
and the participation rate declined (the latter from 64.2% to 64.0% in
November). This might indicate people are not getting jobs but leaving
the market.

Most of the drop in unemployment was in adult men, where the
unemployment rate stands at 8.3% currently, -0.5 point on the month.
This stemmed from fewer unemployed and is at odds with the general trend
for job-leaving.

Private Average Hourly Earnings advanced 2 cents for +1.6% over the
year, but hours dipped. This implies income gains but slow production.

Payroll composition included: manufacturing +2,000, construction
-12,000, retail +49,800, finance +8,000, leisure +22,000 (+32,700 in
restaurants), health +17,200, but government -20,000 as state & local

Overall, the report was not so bad but is still indicating an
anemic economy with unemployment remaining too high.

Details: Payrolls/Prior Pv AHE,yoy Agg Hrs Civ Unempl Rt/Unrnd
Nov +120k —- +1.56% 101.6 8.6% (8.6449%)
Oct +100k +80k —— 101.7 9.0% (9.0124%)
Sep +210k +158k —— 101.3 9.1% (9.0847%)

** Market News International Washington Bureau: (202) 371-2121 **