The November jobs report showed higher employment than expected but several statistical anomalies might suggest a recession is approaching.
- The U.S. Bureau of Labor Statistics (BLS) released the November jobs report on Friday, December 2, which showed that job growth exceeded expectations.
- The economy added 263,000 jobs for the month of November while the unemployment rate slightly rose from 3.5% in October to 3.7%.
- The Federal Reserve’s hiked interest rates are slowing down the economy, which is reflected by a small decline from October, but numbers were still higher than was projected.
- Two contradictory data points could point to the possibility that the economy is in worse shape than it appears—marginal workers are having a harder time finding jobs and survey respondents aren’t turning in surveys.
Why it’s News
The economy continues to perplex analysts who report that there is a discrepancy between the recessive and inflationary tendencies of the past year and high rates of employment. As we previously reported, most analysts predict a recession is imminent or has already started, but job numbers continue to hold strong.
“Job gains had been running strong this year, if a bit lower than the rapid pace of 2021. On a monthly basis, payrolls have been up an average of 392,000 against 562,000 for 2021. Demand for labor continues to outstrip supply, with about 1.7 positions open for every available worker,” says CNBC.
One BLS study shows that job growth may have stalled this year. A household study of 60,000 homes showed that only 12,000 were employed and that the number had dropped four months out of the prior eight. This could reflect a sampling error or the possibility that unemployment is higher than projected, particularly among marginal workers easily displaced during the first waves of a recession, Axios reports.
“Initial claims for unemployment benefits ticked up last week while continuing claims for benefits jumped to their highest level since February—suggesting that people who are out of work are taking longer to find a job,” says Axios.
Another statistical curiosity was the low response rate for job surveys, with the percentage of potential participants dropping from 67% in October to 40.4% in November. This does not necessarily reflect anything, as low response rates could just be caused by poor timing with the Thanksgiving holiday, although the dip was notable. JP Morgan Chase economist Daniel Silver noted it was “more curiosity than signal.”
These two statistical outliers could reflect early symptoms of a recession or a fluke.