Slowing labor market narrative 'intact' after jobs data
The national unemployment rate fell to 3.7% while 199,000 jobs were added to the US labor market in the month of November. ZipRecruiter Chief Economist Julia Pollak states these prints are keeping the Fed's slowing labor market narrative "intact."
Aggregate labor income has "grown 9.1% in the last month on an average annualized basis. That's very strong. Right before the pandemic, it was growing 4.6% year-over-year," Pollak tells Yahoo Finance, commenting on wage growth data.
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This post was written by Luke Carberry Mogan.
Video Transcript
JULIE HYMAN: What's your big takeaway of, sort of, where we are in this employment cycle?
JULIA POLLAK: So it was a mixed report with a huge household survey and a weaker and narrower establishment survey.
I think the overall takeaway is that the picture remains intact, the labor market is slowing.
So that 199,000 number should really be quite a bit lower because 35,000 of those workers were just people returning from strike.
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That puts the underlying rate of growth at around 160,000, which is exactly in line with the 2019 average.
The labor market is all the way back to pre-pandemic normal.
JOSH LIPTON: And Julia, let me ask you about one metric there.
It's getting a lot of interest that an unemployment rate ticking down to 3.7%.
Just walk us through, Julia, what explains that.
Did that tick down for all the right reasons?
JULIA POLLAK: Yes, it ticked down because of new entrants coming in, but this is a volatile measure.
The household survey in general is a volatile survey that showed more than 700,000 people coming to work in November, a huge employment increase, which we know is just statistical noise.
Last month it showed 300,000 people leaving employment.
And so it's important not to focus on one number.
Overall, unemployment has been around 3.7%, 3.8% the last couple of months give or take.
JULIE HYMAN: And one of the numbers you were looking at as well, not to pick on another individual number, is aggregate labor income, which is the number of employees working times the hourly wage.
Their working hours that is times the hourly wage.
And there we saw growth of about 8%.
So that's hourly workers working more, making more per hour if I'm reading that correctly.
What does that imply about lower income hourly workers?
JULIA POLLAK: Yeah, so it's grown 5.3% year over year.
It's grown 9.1% in just the last month on an average annualized basis.
That's very strong.
Right before the pandemic, it was growing 4.6% year over year.