Today’s payroll report for November showed continued acceleration in the pace of recovery. While the unemployment rate held steady at 5.8 percent, nonfarm payroll employment increased by 321,000 and office-using payrolls showed the second-largest monthly gain since 2000.
Employment in professional and business services rose by 86,000 in November (Table 1 and Chart 1). Accounting and bookkeeping services added +16,000 jobs, while employment in temporary help services rose by +23,000. Financial activities employment rose by +20,000 in November—more than twice the average monthly pace over the past year—with gains in insurance carriers and related activities responsible for half of the monthly total.
Table 1. Monthly Change in Office-Using Payrolls by Category (000s, SA)
Based on the positive labor market momentum, one question is the extent to which wage gains have materialized, particularly given the news that private sector average hourly earnings rose by 0.4%—the largest increase in 17 months. As shown on Chart 2 , very few sectors are showing upward momentum in wages— construction, financial activities and education/health services being among them—suggesting that for now, wage inflation does not appear to broad-based. Wage growth has slowed in areas like professional/business services, for example: the annualized pace of wage growth over the last three months has been 1.8% (August – November), which compares to 2.5% growth from May – August, 2.7% growth from February – May, and 2.4% over the last 12 months.
Chart 1. Office-Using Employment and Total Payrolls, October 2007 – October 2014 (Seasonally-Adjusted, 000s)
Chart 2. Average Hourly Earnings Growth by Sector, 3-Month Intervals (Annualized), Seasonally-Adjusted