November jobs show Obama handing off a solid US economy to Trump

Assuming Donald Trump does become president next month, he can't say Barack Obama left a mess for him to clean up when it came to the US jobs market. Friday's November jobs report reiterated that, with the big news probably being the drop in the unemployment rate to 4.6%, the lowest we have seen since August 2007.

That decline comes from a combination of good and bad statistics.

Seasonally-adjusted change from October 2016
Labor Force -226,000
Employed +160,000
Unemployed -386,000

These positive stats seem a bit much for one month, and I wouldn't be surprised if some of that 0.3% drop in November is reversed next month. But there is no doubt that the jobs market remains near full employment as the Obama Presidency ends, which is a pretty remarkable accomplishment given the wreck he inherited in January 2009 (and do you have any doubt Drumpf and the GOP will mess it up if given the chance?).

On the jobs totals side, we saw a trend of decent-but-not-great growth continue in November, and staying slightly below the strong pace we saw last year. As the Bureau of Labor Statistics notes

Total nonfarm payroll employment rose by 178,000 in November. Thus far in 2016, employment growth has averaged 180,000 per month, compared with an average monthly increase of 229,000 in 2015. In November, employment gains occurred in professional and business services and in health care....

The change in total nonfarm payroll employment for September was revised up from +191,000 to +208,000, and the change for October was revised down from +161,000 to +142,000. With these revisions, employment gains in September and October combined were 2,000 less than previously reported. Over the past 3 months, job gains have averaged 176,000 per month.

It sure beats talking about the hundreds of thousands of jobs a month that we were losing the last time we had a new president taking over, but it's also noteworthy that these figures indicate a near full-employment situation, and it may be hard to have a much higher rate of growth at this time or going forward.

A look inside the sectors shows that some seasonal anomalies played a role in how the employment report looked, but that they likely canceled themselves out in the big picture. For example, Construction was a standout part of this report, with a gain of 19,000 on a seasonally-adjusted basis. However, seasonally-adjusted is a key word, as much of the Northern part of the country was seeing unusual warmth in mid-November, when the monthly survey was taken. The 19,000 "increase" is really a reflection of lower-than-normal seasonal layoffs of 78,000, which makes me concerned that this number changes now that the weather finally has cooled and the snow is apparently starting to fly.

A seasonal blip may also be the reason for a 15,400 increase in local government employment, as the election was held on the week of the survey, and it is not hard to suggest that much of that increase is temporary workers manning the polls. On a related point, don't be shocked if there is a similar increase in Wisconsin's December employment due to temporary workers helping out with the recount.

But seasonal factors also seemed to be a factor in a sizable drop in retail trade employment, as hiring for the Christmas shopping season hadn't happened as much when the survey was taken. The sector as a whole had been adding nearly 21,000 jobs a month since November 2015, but had a seasonally-adjusted "loss" of 8,300 jobs in November. This is despite retail actually adding 371,200 people on a non-seasonal basis, and clothing and accessory stores were especially notable in this trend, as 94,000 new workers translated into a loss of 17,600 seasonally-adjusted jobs. We'll see if that snaps back in December, as the real season kicks into full swing- or we'll find out if malls and brick-and-mortar stores are dead and this is a sign of it.

The last part of the equation involves wages, which had a correction from a sizable jump in October.

In November, average hourly earnings for all employees on private nonfarm payrolls declined by 3 cents to $25.89, following an 11-cent increase in October. Over the year, average hourly earnings have risen by 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees edged up by 2 cents to $21.73 in November.

Wage growth is something we will need to look at in the coming (gulp) Trump presidency, because a lot of the blue-collar types who voted for Trump were hoping that their wages and job prospects could include. If wage growth stays at 2.5% or goes down, especially with oil and gasoline prices rising in the near future, watch for those voters to turn their frustrations on the same politicians they helped elect in 2016.

So in summary, it appears the US jobs market is staying in the same decent-but-not-great situation that we've seen over the last year. Which makes it all the more concerning that the Republicans in charge of things in DC and the states seem determined to change it all, and likely not to the benefit of the vast majority of Americans.