Does the November Jobs Report Indicate Slowing Economic Growth?

Dec 12, 2018
| Michael Altiero
November 2018 Jobs Report

We are in the final month of 2018, which proved to be an extremely positive year for the United States economy. This past year saw a boom in job growth, unemployment rate reach a low that hasn't been seen since the late 1960s, and indications that wage growth could be turning the corner (something experts wanted to see).
 
October’s Jobs Report revealed the highest wage growth since 2009, which was met with enthusiasm, but does the overall data from November mean that the economy is beginning to slow down?
 
Let’s take a closer look at some of the data uncovered by the Bureau of Labor Statistics in their November 2018 Jobs Report.
 

Job Growth Falls Short of Expectations

October saw a significant rise in the number of new jobs created, far exceeding expectations set by economists. Given that September’s numbers in this area were very disappointing, it was seen a rebound for the economy.
 
So what were the results for November? The Bureau of Labor Statistics showed that the United States gained 155,000 jobs, which fell short of predictions (190,000). Clearly this wasn’t the data experts were hoping to see.
 
Additionally, the average job growth for September, October, and November was around 170,000 jobs. Some economists worry that the poor results in job creation could be an indicator that the United States economy is approaching a period of stalling growth, although not all feel the same.
 

Unemployment Rate Remains the Same for Third Straight Month

Unemployment has been at the lowest percentage since 1969 over the last two months, and that trend didn’t change in November.
 
The Jobs Report revealed that unemployment stayed at 3.7% for the third consecutive month. This was once again a very positive outcome in the report and is why not all experts have negative outlooks for the economy in the immediate future.
 
However, wider measures of unemployment did see a change. This “broader” measurement includes discouraged workers who have given up their job search and part-time employees who want full-time positions.
 
This unemployment rate was at 7.4% last month (which was a 17-year low), but rose to 7.6% in November’s report. This was due to the fact that the number of involuntary part-time workers saw a large increase.
 
We will have to wait until December’s report to see if unemployment stays the same or changes as the New Year arrives.
 

Wage Growth Also Stays the Same

As mentioned earlier, one of the most closely watched areas of the monthly Jobs Report has been wage growth. Many economists and industry professionals were concerned with the amount of growth within the labor market, but the lack of wage increases.
 
However, the October number came in at 3.1%, which was the first time since mid-2009 that wage growth was over 3%.
 
In November, hourly earnings rose 6 cents to $27.35. This resulted in wage growth remaining unchanged at 3.1%.
 
Given the competitive nature of the talent market, it’s been expected that employers will have to eventually increase wages in order to attract and retain employees. It looks like this is currently happening based on the last two months Jobs Report data.
 

What Will Happen to the United States Economy?

Even though the November Jobs Report had mixed results, experts seem to be split on what will happen to the U.S. economy over the next few months.
 
Will a slowing down period begin in the new year or will the economy rebound in December (and into 2019)?
 
We will have to wait until early January to get a better idea.

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