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Encouraging Signs from November U.S. Jobs Report

The powers that be are stepping on the gas just a bit, and things are looking up for 2018 (if somewhat modestly). Jobs continue to grow at reasonable pace, and wages continue to creep up.

The U.S. economy added 228,000 jobs for November, and the unemployment rate held rock-steady at 4.1 percent as well, according to the U.S. Bureau of Labor Statistics. Average hourly earnings for the trailing 12-month period were up by 2.5 percent.

 

Ed T 12 15 2017 Figure 1

Though it’s a close race sometimes, wages continue to (barely) outpace inflation as they grow steadily and slowly. Source: Wall Street Journal under the “Earning More” heading

 

This keeps us in the situation of low but steady growth that’s characterized the job market for the past two years or so, despite the occasional up or down tick in job growth numbers we’ve seen intermittently over that period. Fortune and other sources observe that wage growth remains somewhat sluggish, but many economists predict that it will accelerate in 2018 (see the Wall Street Journal item “Economists Aren’t Giving Up on Wage Growth”), perhaps to as high as 3 percent.

 

This should make our new President ecstatic, as he’s been predicting this as a natural consequence of the tax reform bills still underway in our national legislature. To offset the ebullience this may provoke, it’s also important to observe that monthly job growth for 2017 so far has averaged 174,000, while the average for 2016 was 7 percent higher, at 187,000 jobs per month.

 

A look at the major sectors shows both expected and some surprising gains. Professional and business services added 46,000 jobs in November, and that sector has added 548,000 jobs over the past 12 months. That means November’s figures nearly match the average over the preceding year (46,000 for November versus 45, 667 for the average).

 

Construction (+23,000) and manufacturing (+31,000) showed interesting and surprising gains. Health care continues its steady pace, with 30,000 jobs added for the month, above the 24,000 monthly average for 2017, but below the 32,000 average for the preceding year. The BLS report states that other sectors were little changed, including our own home sector of information.