The November Employment Report has just hit the tape, with the Labor Department reporting 211,000 jobs were added during the month vs. consensus expectations of 200,000, and the unemployment rate remaining at 5%, flat with October. Peering into the report, job gains in September and October were both revised higher, but even after three months of solid gains the labor force participation ratio hit 62.5% in November compared to 62.9% a year ago. Meanwhile, the November employment-population ratio was unchanged at 59.3% and it's worth mentioning this metric has shown little movement since October 2014.
Digging in and moving past the regularly quoted metrics of the report, two things caught my eye. First, was the month-over-month decline in the "Not in Labor Force" category, which up until November had been steadily growing. The other is the sharp growth in part-time work, which added 319,000 jobs in November and likely reflects seasonal hiring for the holiday shopping season as well as extended construction activity given the mild weather in November that has vexed retailers.
To me, this speaks to the issues for how the data is treated. In my view, a part-time job is good, but we all know full-time jobs are where it's at, especially since seasonal hiring tends to become seasonal firings, particularly for retail.
The bottom line on this report, which was pretty much in line with headline expectations, is that despite the sharp ramp in part-time hiring, it's not the miss that many were looking for in hopes of holding off the Fed from boosting interest rates at its next FOMC Meeting (Dec. 15-16).
That makes the report good news for financials, such as the banks and brokerages like Trifecta Stocks holding TD Ameritrade (AMTD), and not so good news for higher-dividend-yielding stocks such as Omega Healthcare Advisors (OHI) and other REITs. From my vantage point, the next report to focus on ahead of the Fed's mid-December meeting is next week's Producer Price Index (PPI).
