Private payrolls increased by 147,000 last month on a seasonally adjusted basis, the Labor Department reports. That represents a considerably slower rate of growth from October’s revised 189,000 jump, but today’s number beat expectations by a comfortable margin. The consensus forecast compiled by Briefing.com, for instance, projected a lesser gain of 120,000. Meanwhile, the jobless rate reportedly fell to 7.7%. I don’t pay much attention to this number—payrolls data is more informative for business cycle analysis. Nonetheless, it’s hard not to notice that unemployment slipped to the lowest level in nearly four years. There’s a lot of debate about the relevance of the unemployment numbers, but to the extent that this data tells us anything it’s the direction of the trend, and for now that seems to be moving in a productive direction: down.

Meanwhile, the relatively upbeat news for payrolls isn’t a total surprise after yesterday’s favorable update on weekly jobless claims. Any one employment report, of course, is suspect and so it’s wise not to read too much into today’s data. But when we look at November’s jobs picture in historical context, the trend continues to look encouraging.
The net gain in private payrolls last month represents a 1.8% rise from a year ago. That tells us that the economy’s capacity to mint new jobs remains more or less unchanged vs. recent history. Since April, the annual rate of growth in private payrolls has closely hugged the 1.7%-to-1.8% range. That’s mediocre compared with the glory days in the 1990s, when annual increases of 2.5% to 3.0% were common. But relative to the five years just before the Great Recession hit, 1.7%-plus looks decent.

In fact, it’s the stability of the annual pace that is most encouraging. Everyone would like to see much faster job growth, of course. But the fact that private payrolls continue to grow at a steady rate that compares favorably with recent history is a strong clue for thinking that the labor market still has forward momentum. That’s not everything when it comes to business cycle analysis, but it’s a lot. Yes, next month may bring calamity, but today’s number at least is dispatching a familiar refrain: slow growth.
“We’re making progress in the labor market,” says Michael Gapen, a Barclays economist. “We expect a return to a pace of hiring that suggests we’re moving in the right direction. It’s not as fast as policy makers would like, but employment is growing.”
There’s nothing in today’s jobs report that challenges that notion. Yes, the overall macro environment remains precarious for several reasons, starting with the present danger otherwise known as politicians in Washington who continue to argue over you know what. It wouldn’t be difficult to come up with a lengthy list of things that could go wrong and derail the slow-growth train we’re on. But for the moment, the incoming data hasn’t surrendered to the darker angels of risk.
There are still a few numbers yet to come to complete the November economic profile, but it appears that we dodged a bullet last month once again. Is that a surprise? Actually, no–the numbers overall have been telling us for some time that recession risk is still low, as shown in the regular updates of The Capital Spectator Economic Trend Index, including this one from last month. How does the big picture stack up with the latest numbers through November? I’ll have an update on Monday, but today’s employment report gives us more number for the positive column.