November Job Growth Strong
Dec. 2, 2005 — -- The Bureau of Labor Statistics released a report this morning showing that the nation's employers added 215,000 new workers to their payrolls during November. Most economists had expected to see 220,000 new positions, so the numbers are about where they were expected to be.
The nation's unemployment rate -- computed as part of a different survey -- remains at 5.0 percent.
What does this mean? The nation's employment situation has bounced back from the effects of Hurricanes Katrina and Rita. During the last 12 months, the average gain has been around 160,000, so today's report is well above the norm.
Many economists will say these numbers prove the bullish case -- that the economy is moving along and that consumer confidence will soon trip higher (jobs security and opportunity being one of the key determinants of people's willingness to spend).
Where did the jobs come from? November's hiring was strong in most sectors -- including some that have traditionally seen declines.
"What is impressive is the broad-based nature of the increases," said Joel Naroff, chief economist at Naroff Economic Advisors. "Over 62 percent of the industries reported payroll gains, the highest since hiring began to rebound sharply in spring of 2004."
Construction jobs were especially strong, showing about 37,000 additional jobs during the month.
"Some of the recent job gains in construction reflect rebuilding and clean-up efforts following Hurricanes Katrina, Rita and Wilma," said Kathleen Utgoff, commissioner of the Bureau of Labor Statistics. "In November, for example, there was a substantial employment increase in heavy construction, which includes utility, road, and other major infrastructure work."
Other bright spots: Education and health services (+36,000), restaurants and bars (+39,000), business services (+29,000) and manufacturing (+11,000). No, you're not misreading this … manufacturing jobs are up according to the report, and have been for the last two months.
There were also some industries showing contraction during November: auto dealers (-6,300), hotels (-3,800) and clothing stores (-5,900).
How much does this matter? This is important. The jobs report is arguably one of the best economic indicators out there, and it's easy to understand.
Definition: The non-farm payrolls number is a measure of the number of new jobs created by the private sector during the month. It is based on a survey of about 160,000 businesses and government agencies. The national unemployment rate comes from a separate survey of households.
