Economy: Employment Situation Report for November 2020

The Employment Situation Report for November 2020 was released by The Department of Labor's Bureau of Labor Statistics this morning:

Nonfarm Payrolls (month-to-month change)
Predicted: +300,000
Actual: +245,000

U-3 Unemployment Rate (Headline)
Actual: 6.7%
Previous Month: 6.9%
12 Months Previous: 3.5%

U-6 Unemployment Rate*
Actual: 12.0%
Previous Month: 12.1%
12 Months Previous: 6.8%

Average Hourly Earnings (month-to-month change)
Predicted: +0.2%
Actual: +0.305% (+$0.09)

Average Hourly Earnings (year-on-year change)
Predicted: +5.0%
Actual: +4.375% (+$1.24)

Average Weekly Earnings (month-to-month change)
Actual: +0.305% (+$3.13)

Average Weekly Earnings (year-on-year change)
Actual: +5.897% (+$57.32)

Civilian Labor Force Participation Rate: 61.5%
Previous Month: 61.7%
12 Months Previous: 63.2%

Average Workweek
Predicted: 34.8 hours
Actual: 34.8 hours

Economist, academics, central bankers and investors pay very close attention to the monthly Employment Situation report as it offers penetrating insight as to the current and near-future state of the overall U.S. economy. If a) Americans are earning more money and b) the economy is creating new jobs, this typically translates to more money being pumped into the economy (and vice versa.)

The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

===================

From Today's Report:

"...The change in total nonfarm payroll employment for September was revised up by 39,000, from +672,000 to +711,000, and the change for October was revised down by 28,000, from +638,000 to +610,000. With these revisions, employment in September and October combined was 11,000 more than previously reported..."

"...Coronavirus (COVID-19) Impact on November 2020 Establishment and Household Survey Data

Data collection for both surveys was affected by the coronavirus (COVID-19) pandemic. In the establishment survey, approximately one-fifth of the establishments are assigned to four regional data collection centers for collection. Although these centers were closed, interviewers at these centers worked remotely to collect data by telephone. Additionally, BLS encouraged businesses to report electronically. The collection rate for the establishment survey was 74 percent in November, about the same as the average for the 12 months ending in February 2020. The household survey is generally conducted through in-person and telephone interviews. However, for the safety of both interviewers and respondents, in-person interviews were conducted only when telephone interviews could not be done.

The household survey response rate was 79 percent in November, considerably higher than the low of 65 percent in June but below the average of 83 percent for the 12 months ending in February 2020.

In the establishment survey, workers who are paid by their employer for all or any part of the pay period including the 12th of the month are counted as employed, even if they were not actually at their jobs. Workers who are temporarily or permanently absent from their jobs and are not being paid are not counted as employed, even if they continue to receive benefits. In the household survey, individuals are classified as employed, unemployed, or not in the labor force based on their answers to a series of questions about their activities during the survey reference week (November 8th through November 14th). Workers who indicate they were not working during the entire survey reference week and expect to be recalled to their jobs should be classified as unemployed on temporary layoff. As in recent months, a large number of persons were classified as unemployed on temporary layoff in November.

Since March, household survey interviewers have been instructed to classify employed persons absent from work due to temporary, coronavirus-related business closures or cutbacks as unemployed on temporary layoff. As happened in earlier months, some workers affected by the pandemic who should have been classified as unemployed on temporary layoff were instead misclassified as employed but not at work. However, the share of responses that may have been misclassified was highest in the early months of the pandemic and has been considerably lower in recent months.

For March through October, BLS published an estimate of what the unemployment rate would have been had misclassified workers been included among the unemployed. Repeating this same approach, the overall November unemployment rate would have been 0.4 percentage point higher than reported. However, this represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error.

According to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses..."

===================

Chart: Nonfarm Payroll Employment

November 2020 Update

===================

Chart: U-3 (Headline) Unemployment Rate

November 2020 Update

===================

* = The U-6 Unemployment Rate is defined as:

"Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force."

===================