November jobs report – seasoning is everything

By Steve Eggleston

On Friday, the Bureau of Labor Statistics released the November jobs report, and everybody focused on the seasonally-adjusted gain of 321,000 jobs, 314,000 in the private sector. I’ll join the club and start there. On a seasonally-adjusted basis, that is the best overall and private-sector 1-month gain since January 2012, when the economy added 360,000 jobs overall and 364,000 in the private sector. Further, it’s the best overall November since 2005 (a 337,000-job add) and the best private-sector November since 1994 (a 396,000-job add).

However, as I’ve learned with any government report, things are rarely as good as they seem. John Crudele of the New York Post took a look at the seasonal adjustments, and he came away rather disillusioned. On a not-seasonally-adjusted basis, the economy added 497,000 jobs overall and 380,000 in the private sector. Though both numbers are the third-best November of the 21st Century, they actually were behind last November’s add of 523,000 jobs overall and 398,000 in the private sector, which was seasonally-adjusted to adds of, respectively, 274,000 and 272,000.

Crudele asked the Labor Department for an explanation, and their economists were perplexed. A partial explanation comes from Tom Blumer, who remembered that the October seasonal adjustments were as unkind as November’s are kind.

The growth in jobs didn’t exactly translate to either a change in the unemployment rate or in the number of employed. The seasonally-adjusted unemployment rate (5.8%), labor force participation rate (62.8%, still a multi-generational low) and employment-population ratio (59.2%) all remained unchanged when rounded to the nearest tenth of a percent, with the number of employed increasing by 4,000, after last month’s equally-anomalous 683,000 add, and the number of unemployed increasing by 115,000.

Blumer also noted that, on the full-time front, we are still very short of where we were in November 2007. Even though, on a not-seasonally-adjusted basis, there are 548,000 more people employed now than there were in November 2007, there are 2,405,000 fewer people working at least 35 hours per week now, with 396,000 more people working multiple part-time jobs presumably to reach full-time status. On the positive side, 2,566,000 more people were working full-time last month than in November 2013.