The BLS job situation headlines seems good. However, after opening the hood, the deceleration in the year-over-year growth rate continues.

The rate of growth for employment dramatically decelerated this month (red line on graph below).

Unadjusted Non-Farm Private Employment – Year-over-Year Change (blue bars – left axis) and Year-over-Year Growth Acceleration / Deceleration From Previous Month (red line – right axis)

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The unadjusted jobs added month-over-month was normal for times of economic expansion.

Economic intuitive sectors of employment were mixed.

This month’s report internals (comparing household to establishment data sets) was fairly consistent with the household survey showing seasonally adjusted employment growing 244,000 vs the headline establishment number of growing 211,000. The point here is that part of the headlines are from the household survey (such as the unemployment rate) and part is from the establishment survey (job growth). From a survey control point of view – the common element is jobs growth – and if they do not match, your confidence in either survey is diminished. [note that the household survey includes ALL jobs growth, not just non-farm).

The household survey added 273,000 people to the workforce.

A summary of the employment situation:

BLS reported: 211K (non-farm) and 197K (non-farm private). Unemployment unchanged at 5.0%.

ADP reported: 217K (non-farm private)

In Econintersect‘s November 2015 economic forecast released in late October, we estimated non-farm private payroll growth at 130,000 (unadjusted based on economic potential) and 145,000 (fudged based on current overrun of economic potential);

The market expected (from Bloomberg):

Seasonally Adjusted Data Consensus Range Consensus Actual Nonfarm Payrolls – M/M change 160,000 to 219,000 190,000 211,000 Unemployment Rate – Level 4.9 % to 5.2 % 5.0 % 5.0 % Private Payrolls – M/M change 150,000 to 214,000 185,000 197,000 Average Hourly Earnings – M/M change 0.1 % to 0.3 % 0.2 % +0.2 % Av Workweek – All Employees 34.5 hrs to 34.6 hrs 34.5 hrs 34.5 hrs

The BLS reports seasonally adjusted data – manipulated with multiple seasonal adjustment factors, and Econintersect believes the unadjusted data gives a clearer picture of the jobs situation.

Non-seasonally adjusted non-farm payrolls grew 227,000 – the lowest since 2010.

Historical Unadjusted Private Non-Farm Jobs Growth Between Octobers and Novembers (Table B-1, data in thousands) – unadjusted (blue line) vs seasonally adjusted (red line)

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Last month’s employment gains were revised upward.

Change in Seasonally Adjusted Non-Farm Payrolls Between Originally Reported (blue bars) and Current Estimates (red bars)

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Most of the analysis below uses unadjusted data, and presents an alternative view to the headline data.

Unemployment

The BLS reported U-3 (headline) unemployment was 5.0% with the U-6 “all in” unemployment rate (including those working part time who want a full time job) worsened 0.1% to 9.9%. These numbers are volatile as they are created from the household survey.