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Challenges at Home and Abroad

Employment Report Records a Big Miss, Unemployment Down and Wage Growth Slows

Non-farm payrolls were up just 210,000 in November, falling far short of the consensus estimate of 550,000. The unemployment rate fell sharply to 4.2% from 4.6%. The large discrepancy between the payroll number and the unemployment rate is likely due to one of the main differences between the surveys used to collect the data. The survey for payrolls doesn’t capture marginally attached workers, which includes self-employed contractors, "off-the-books" work and other types of non-standard occupations. This may be consistent with the dramatic rise in business applications we’ve seen since the recovery began. A broader measure of unemployment, which includes discouraged workers and those holding part-time jobs for economic reasons, dropped even more, falling to 7.8% from 8.3%. Average hourly earnings growth slowed over the past three months from 0.6% in September to 0.3% in November, suggesting there are some signs that upward pressure on wages is beginning to wane.