NFP data (Non-Farm Payrolls) from November 2016 indicates that employment increased by an additional 178,000 new jobs. This is a marked improvement on the 142,000 revision by analysts. The bulk of these new jobs came from healthcare, professional services, and business services. NFP data in 2016 has whipsawed between a July high of 271,000 new jobs and a May low of just 24,000 new jobs. Consensus estimates for January 2017 with the reference point December 2016 are 172.4K jobs. The market expectation for November jobs was 175,000. If we look at the individual sectors, we see gains of 19,000 in construction, and gains of 28,000 in healthcare. Business services increased by 63,000 new jobs, and that is made up of consulting services, support services, admin services, bookkeeping services, and related services.
Unemployment Rate Plunges to 4.6%
What is particularly important about the recent performance of the US economy is that the unemployment rate plunged to 4.6%. This makes it more likely than any point in the year that the Fed will act at its final meeting on Wednesday, 14 December 2016. Employers across the US continued to hire at a healthy rate during November. This is the lowest unemployment level in the country in 9 years. Per official data releases, some 15 million new jobs were added to the US labor market since it hit a low point in 2010. However, there is still growing concern that many of the deep-seated challenges facing the US economy have not been solved, and key issues have not been addressed. The meeting on Tuesday/Wednesday, December 13/14 2016 is likely to focus on declining unemployment figures as the catalyst to push through a 25-basis point rate hike.
Which Sectors of the US Economy Are Booming?
This is the lowest unemployment rate since 2007 August, but the figures should be scrutinized since they don’t include people who have stopped looking for work. This is one of the long-term worrying trends of the US economy – people who have simply opted out of the workforce altogether. Much of the job creation that has taken place is in the service sector. And the mining and manufacturing sector has shed tremendous numbers of jobs since 2015. The rebound in construction is notable, with 155,000 jobs created in the past year alone. This is likely to play well into a Trump presidency in 2017. In October 2016, the broad measure of underemployment indicates a figure of 9.5%. For the unemployment rate in November 2016, the figure is just 4.6%. What is particularly impressive about the US economy is the addition of 250,000 new jobs in the restaurant industry. Employment is tight in the sector, and this is presenting employed individuals with many opportunities for advancement towards supervisory and management levels.
