The unemployment rate is a measure of the percentage of the total labor force that is unemployed but actively seeking employment and willing to work. It’s a key indicator of the health of the labor market and the economy. For example, an unemployment rate of 4.2% means that 4.2% of the people who are able and willing to work are currently without a job.
Nonfarm payrolls refer to the total number of paid workers in the U.S. excluding farm employees, government employees, private household employees, and employees of nonprofit organizations. This statistic reported monthly by the U.S. Bureau of Labor Statistics and is a critical indicator of economic health. An increase in nonfarm payrolls typically signals economic growth and means more jobs creation.
Employment Situation – November 2024
In November 2024, the U.S. Bureau of Labor Statistics reported a rise in total nonfarm payroll employment by 227,000, with the unemployment rate up a bit to 4.2%. Significant job gains were observed in sectors like health care, leisure and hospitality, government, and social assistance, while retail trade saw a decline in employment.
Key Highlights:
- Unemployment Rate: The rate remained at 4.2%, with 7.1 million unemployed individuals. These are higher than last year.
- Major Worker Groups: The unemployment rate for Blacks edged up to 6.4%, with little to no change for other demographic groups.
- Long-term Unemployment: There were 1.7 million long-term unemployed, making up 23.2% of all unemployed people.
- Labor Force Participation: The rate held steady at 62.5%, with the employment-population ratio at 59.8%.
- Part-time Employment: 4.5 million people were employed part-time for economic reasons, up from 4.0 million a year earlier.
- Not in the Labor Force: 5.5 million individuals wanted a job but were not counted as unemployed because they were not actively looking for work.
Establishment Survey Data:
- Job Gains: Health care added 54,000 jobs, leisure and hospitality gained 53,000 jobs, government employment increased by 33,000, and transportation equipment manufacturing rose by 32,000.
- Retail Trade: Experienced a loss of 28,000 jobs.
- Average Hourly Earnings: Increased by 13 cents to $35.61, marking a 4.0% rise over the past 12 months.
- Average Workweek: Edged up to 34.3 hours for all employees on private nonfarm payrolls.
- Government Payrolls: Increased by 33,000 in November.
- Manufacturing Payrolls: Rose by 22,000 in November.
Impacts of Report on Stock Market
This report highlights the continued growth in employment across several sectors. Despite some areas of concern, such as retail trade and long-term unemployment the report showed a strong job gain.
The 227,000 increases in payrolls, surpassed market expectations of 214,000. This positive data boosted investor confidence, leading to a rise in stock prices. The strong job numbers indicated a robust economy. This can lead the Federal Reserve to reconsider interest rate cuts in December meeting. The S&P 500 saw a rise following the release of the job report, which showed a stronger-than-expected job gain.
