November NFP Report


Last Friday morning, December 6, the Labor Department released the November nonfarm payrolls report.

Headline Figures

  • November nonfarm payrolls rose 203,000, ahead of consensus estimates for 185,000 and better than last month’s 200,000

o   October nonfarm payrolls was revised lower from 204,000 to 200,000

  • November private payrolls fell to 196,000 from last month’s 214,000

o   October private payrolls were revised higher from 212,000 to 214,000

  • The unemployment rate (Figure 1) in November fell to 7.023% from 7.280% in October

 Composition of the Report

  • September nonfarm payrolls were revised higher to 175,000 from a previously reported 163,000
  • The unemployment rate at 7.0% is at its lowest level since November 2008
  • The labor force participation rate rose to 63.0% from 62.8%
  • Household measure of employment rose 818,000
  • The underemployment rate fell to 13.2% from 13.8%
  • Average weekly hours rose to 34.5 in November from 34.4 in October
  • Average hourly earnings rose 0.2% month on month
  • Average hourly earnings rose 2.0% year on year
  • Manufacturing payrolls rose 27,000 in November from 19,000 in October
  • Federal government payrolls fell 7,000, the sixth consecutive month of declines
  • Leisure & hospitality fell from 49,000 in October to 17,000 in November
  • Trade & transport rose to 60,000 from October’s 41,000

Monthly Average Nonfarm Payrolls Prior 10 Years

2013 on pace for the best year since 2005





















Source: U.S. Labor Department


COMMENTARY: The November nonfarm payroll report continues the series of better-than-expected domestic economic news, and clearly increases the chances for the initiation of Fed tapering at the December 17-18 FOMC meeting. I would characterize the chances are at 50/50, rising from 25/75 just one month ago.

More importantly, investors should understand that the trend for recent economic data is not only improving but also recording in each instance better-than-consensus estimates. In an environment in which consensus estimates are below the actual economic data, it is difficult to envision a “bubble” environment as is currently being bantered for risk assets.

Friday’s post-payroll trading witnessed the 10-year Treasury yield (Figure 2) reach 2.9286%, its highest level since September 13. However, trading was orderly and by the day’s end the 10-year yield closed down on the session at 2.8553%. Good news has become good news and markets are responding without significant volatility.

Figure 1 U.S. Unemployment Rate, 2008-2013

Source: Bloomberg

Figure 2 U.S. 10-Year Treasury Yield 2013

Source: Bloomberg

Past performance is not a guarantee of future results.

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