November jobs report: Labor force participation increases to 61.8%

Yahoo Finance's Emily McCormick breaks down the sector employment numbers in the November jobs report.

Video Transcript

JULIE HYMAN: Let's discuss the jobs report itself in more detail. our Emily McCormick has been going through the report, as she always does, with a finetooth comb. Emily, give us the highlights here in what stands out to you.

EMILY MCCORMICK: Well, Julie, it's certainly worth reiterating those headline figures that we got out from the Labor Department's November jobs report here. And it was a mixed report this morning on the state of the labor markets recovery. The US economy adding back fewer jobs than expected in November, while the unemployment rate fell further than expected to the lowest level since February 2020. But taking a look here at these main numbers, non-farm payrolls growing by 210,000 during the month. That was less than half the 550,000 expected, whereas the unemployment rate was down to 4.2%, better than the 4 and 1/2% expected and the 4.6% we saw in October.

Now, this was the 11th straight month that we've seen net payroll gains in the economy. But we did see that pace of hiring slow, especially in the service sector, where much of the job growth had been previously concentrated earlier on this year. But specifically, we saw leisure and hospitality employers adding back just 23,000 payrolls last month, after October's increase of 170,000. And if we take a look at retail trade, those employers actually shed payrolls on net, with these down by more than 20,000 after job gains of nearly 40,000 in each of October and September.

Now the slowdown was also seen in the goods producing sector. And specifically, I want to highlight motor vehicle and parts employers, which shed more than 10,000 positions after adding back 19,300 payrolls in October. Now, even though the overall payroll gains did slow in the November jobs report and did come in below expectations, I do also want to highlight that we did see job growth get upwardly revised in each of October and September by a combined 82,000 more than what had been previously reported for these two months.

But in terms of elsewhere in this jobs report, definitely a positive trend again in terms of the unemployment rate and also on labor force participation, where we saw that rate actually tick up more than expected to reach 61.8% versus the 61.6% in October, although we should also note that the civilian labor force was still down by about 2.4 million participants, compared to February 2020 levels.

And then finally, I want to give a quick overview of what we saw in terms of average hourly earnings. Still coming in hotter than we'd seen before the pandemic, but slightly cooler than many economists had been expecting. On a year over year basis, we saw those rise by 4.8% to match the rate that we saw in October, but come in below the 5% increase that we saw during the previous month. So, overall, a mixed bag here for the November jobs report, and a lot for market participants and policy makers to be digesting here. But overall, especially focusing in on that unemployment rate. That really was the bright spot here if we think about this overall big picture for the job market. Guys.

JULIE HYMAN: Emily, thank you so much. Really comprehensive look there at what we learned from this jobs report and what we still have questions about as well. Appreciate it.