The American economy gained 227,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at 137,000 jobs. The headline unemployment rate rose to 4.2%.
This report is something of a mirage. The number of employed workers dropped by 355,000 and the ranks of the unemployed rose by 161,000. As a result, the share of employed people dropped from 60.0% to 59.8%.
Among the prime working age population, the share of employed people has dropped a full half point in just the past two months. The unemployment rate has gone up 0.3% in the past two months and nearly a full point over the past two years:
Some of this discrepancy between the jobs number and the unemployment rate is just the usual mismatch between the establishment survey (number of jobs) and the household survey (unemployment rate). Still, the jobs number is probably just a bit of bounceback from October's big drop. I wouldn't cheer too much for November's news overall.
Trumpcession
The numbers are but one data point and they certainly look quite acceptable. However, there are rumblings out there that the car industry is in trouble, not only with EVs, but other models also. Anecdotally, car dealer lots are packed to the brim and several auto makers have announced cuts in production. There is no doubt that a slow down auto manufacture will have an overall negative impact on the economy and whether this could cause a chain reaction. The American economy has always been resilient but at the same time there are literally millions of vehicles nobody wants that represent negative asset capitalization (meaning negative equity), so someone is taking a bath.
Not necessarily. Excess inventory is not a new phenomenon. It just takes a while to sell them off. They will, however, reduce production in the meantime, which means temporary layoffs. This is also not new to the auto industry. I'm not sure if it's still the case, but union benefits used to pay the laid off workers about 90% of their salary.
Looks like full employment to me. We won.