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Consensus was for 180,000 net new jobs and an unemployment rate of 7.2%. We saw a net 203,000 new jobs in November 2013 and are at a 7.0% unemployment rate. November's numbers are very strong with a significant reduction in unemployment rate and rise in labor force and employment. November Non-Farm Payrolls came in above the new 12-month average monthly growth of 195,000 jobs. Our unemployment rate is returning toward where we were before the great recession. However, our labor force has shrunk and over a third of folks out of work have been out of work for more than 27 weeks.


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We have just had a several week run of above-consensus macro data. ISM manufacturing numbers and Q3 GDP numbers were well above consensus. In all cases, the consensus was fairly cautious and the reasons for the outperformance are open to significant question. The GDP strength on inventory increases, declining imported oil prices and exports tells the story. We acknowledge the better numbers and are thankful in the season of Thanksgiving. However, we remain concerned about the sustainability and representative nature of these numbers. Additionally, it is essential to remain concerned about our large unemployed and underemployed populations.


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To taper or not to taper remains the obsessive question. We are confident that tapering is coming and will start small and that the bigger issues are employment growth, wage growth and interest rates. Clearly, the Fed taper will push the rates up and reduce the accommodation in our accommodative monetary policy. Interest rate normalization will be the real test of our ability to return to "normal" monetary policy - a situation we have not seen in 6 years. In fairness to the Fed, it is wise to wait for the economy, not bond markets or pundits, to send the signals allowing normalization of rates.

We should remember that the November and October reports are choppy given the distortions of the Federal Government shutdown and the attempts to normalize its impact on the statistics.

The civilian labor force rose by 455,000 in November, after declining by 720,000 in October. The labor force participation rate changed little (63.0 percent) in November. Total employment as measured by the household survey increased by 818,000 over the month, following a decline of 735,000 in the prior month. This over-the-month increase in employment partly reflected the return to work of furloughed federal government employees. The employment-population ratio increased by 0.3 percentage point to 58.6 percent in November, reversing a decline of the same size in the prior month Employment Situation Summary December 06, 2013.

Source: November Data: Holiday Gift?