Sandy’s Big Miss
Superstorm Sandy devastated the Northeast and was expected to do the same to measure job growth in November. Shockingly, the BLS concluded that Sandy had no impact during this survey week. The result: the economy created 146,000 jobs in November, while the unemployment rate fell to 7.7 percent. Inside the numbers is a less optimistic story:
- Job creation in September and October was revised down by a total of 49,000 jobs.
- The household survey was weak with employment down 122,000, and labor force participation down 350,000, the major driver of the drop in the top-line unemployment rate.
- Goods-producing manufacturing employment fell by 20,000.
- The growth of employment was less broadly dispersed than in October.
- The Hispanic unemployment rate was flat at 10.0 percent.
- Average weekly hours were flat, although hourly and weekly earnings rose.
In short, a surprisingly strong top-line report with more mixed data inside. Importantly, there is a strong chance of substantial revisions as the impact of Sandy becomes more apparent.
The good news is that the economy continues to be resilient despite headwinds that include the fiscal cliff. The bad news is that at best it reflects only growth at the rate of diminished expectations – not enough to provide strong hope to the millions who remain out of work.
Data junkies here’s your fix: the November U-6 (the broadest measure of unemployment) was down 0.2 to 14.4 percent.
The bottom line: The November jobs report showed surprisingly solid jobs, weakness in labor force growth, and mixed indicators of income growth. It is consistent with the slow recovery thus far, and does not provide strong evidence of acceleration that would make the economy bullet-proof from going over the fiscal cliff, igniting the fiscal Hindenberg, or surviving any of the latest metaphors.