The November jobs report topped market expectations for the seventh consecutive month, showing robust growth at 263,000 new jobs last month. But economists are beginning to notice a divergence within the Bureau of Labor Statistics’ (BLS) monthly snapshot of nonfarm payrolls.
The difference rests in the establishment and household surveys.
Last month, the establishment survey of businesses reported the rosy headline figure. However, the household survey, which samples households rather than businesses, recorded a decline of 138,000 positions. Since March, the establishment component has spotlighted solid and better-than-expected employment gains, while the household portion has been flat.
In total, the divergence has ballooned to an astounding 2.7 million workers.
The reason for the enormous gap is that the establishment component of the BLS report permits double counting, meaning that it will count every additional job that a person obtains as another payroll. The household figure doesn’t.
Over the past year, double counting has surged as more people have taken on two or more jobs amid elevated price inflation. Since November 2021, BLS data show that the number of Americans holding multiple jobs has increased by more than 8 percent to above nearly 7.8 million.
On a nonseasonal basis, full-time employment fell from October to November, while part-time job growth was relatively flat. This is a crucial trend because companies typically shift from full-time to part-time employment before a recession. Employers will then begin initiating layoffs.
In addition, self-employment levels declined by 421,000, to 9.67 million.
The Department of Labor’s diffusion index—a calculation that measures the percentage of 256 industries adding jobs—slipped to 63.5 (anything above 50 indicates expansion). In November 2021, the index stood at 74.8.
Businesses are beginning to eliminate positions, according to various private-sector measurements.
In November, U.S.-based employers announced nearly 77,000 job cuts, the highest since January 2021, according to data from Challenger, Gray & Christmas. The job cuts were concentrated mainly in the tech sector (52,771), followed by consumer products (4,176), health care (2,985), and construction (2,612).
