– December 7, 2017
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One day ahead of the always-important Employment Situation report from the U.S. Bureau of Labor Statistics, indicators for the labor market remain quite strong, suggesting continuing gains in jobs in the U.S. economy. ADP, the payroll processor and HR-services firm, estimated that private payrolls added 190,000 new jobs for November. ADP has estimated an average monthly gain of 202,000 jobs since 2011, versus 196,000 private jobs estimated by the BLS. The latest poll results from Reuters show economists are expecting the BLS report for November to show 190,000 new jobs for the private sector as well. Adding in the public sector, the consensus is that 200,000 jobs were added to payrolls last month.

In addition to net gains in payrolls, the latest data on initial claims for unemployment insurance show 236,00 new filings for the week ended December 2. That is down 2,000 from the prior week. The four-week average, which helps reduce weekly volatility in the numbers, fell 750 to 241,500. Historically, claims below 300,000 are considered consistent with a strong labor market. Claims have been below 300,000 for 144 consecutive weeks and 168 weeks out of the last 177. The four-week average has been below 300,000 for 142 consecutive weeks. Measured as a percentage of employment, initial claims are just 0.152 percent through the end of October, an all-time low.

Confirming the initial claims data are the results from the Challenger, Gray & Christmas survey of planned job cuts. Announced layoffs for November came in at 35,038. The three-month average stands at 32,405, down 4.7 percent from the same period a year ago. Announced layoffs below 50,000 tend to be consistent with a strong labor market, and the three-month average has been below that threshold for 19 consecutive months.

The Employment Situation report is the most comprehensive monthly report on the labor market, so the latest report should provide a more complete picture, but available data as of today suggest the labor market continues to be very strong.

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Robert Hughes

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Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
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