Hi Ho, Hi Ho, It's Off to Work We Go
Friday's great numbers were not a one-time fluke, says Morningstar's Bob Johnson.
All this week's economic indicators pale in comparison to the stunning employment report on Friday. The economy lost just 11,000 jobs in November compared with a consensus estimate of 130,000 job losses. The losses are statistically insignificant when compared against the more than 131 million people employed. The numbers are also a considerable improvement from the 741,000 jobs lost in January 2009.
Just us important, the downward revisions in job losses for September and October were huge. A combined 159,000 jobs were added back to the count for these two months. Other parts of the report were just as positive, as hours worked and temporary workers, two leading indicators, also improved sharply. Overall hours worked jumped 0.2 hours to 33.2 hours in November, while manufacturing hours were even more impressive, improving from 40.1 to 40.4 hours. Manufacturing hours are now up an impressive one hour, or about 2.5%, since May. Hours worked is an important metric because employers generally increase the hours of current employees before they add new people to their payrolls.
On the temporary help front, 52,000 temporary workers were added in November and a total of 117,000 temporary workers have been added since July. Our employment services analyst, Vishnu Lekraj, has been telling me for months that this is one of his favorite early indicators. Employers tend to add temporary help well before they hire more permanent full-time staff.