These days, the operative phrase on Wall Street is Not in a week, not in a month, not in a quarter, rather, it will take years for the U.S. economy to recover from the disastrous 2001-2008 U.S. fiscal policies and related mistakes.
Moreover, that lengthy recovery period also includes the U.S. job market; however on Friday investors and job seekers received another 'ray of light' as the economy created 120,000 jobs in November, and 140,000 in the private sector, according to data compiled by the U.S. Department of Labor (DOL).
Key Data Points: September, October Job Totals Revised Higher
Equally-significant, the job gains for September and October were revised upward, to 210,000 from 158,000 for September, and to 100,000 from 80,000 for October, for a total, revised increase of 72,000 jobs for the two months.
One qualified positive in the November report: the U.S. unemployment rate did fall to 8.6 percent from 9.0 percent in October, but about half the decline stemmed from a workforce reduction -- adults no longer seeking work, hence they aren't officially counted by the federal government as being unemployed. But these Americans will tell you: counted or not, their monthly bills continue.
A broader gauge of employment, the U.S. DOL's U-6, which includes part-time workers seeking full-time work and those who stopped looking for work, remained at 15.6 percent in November.
Also, it was easy to spot the weak points in the November jobs report. Governments, in belt-tightening mode since 2008, continued to slash jobs -- with 20,000 government jobs eliminate last month. That means that federal/state/local governments have cut about 600,000 public sector jobs in the past two years.
Health Care, Retail Continue to Add Jobs
Meanwhile, the positive trend in the retail (50,000 jobs added), professional/business services (up 33,000), leisure/hospitality (up 22,000), and health care (up 17,000) sectors continued. However, employment in the manufacturing and construction sectors showed little change in November.
Also, hourly earnings declined 2 cents to $23.18 and the average workweek was unchanged at 34.3 hours.
Long-Term Trend Is Encouraging for Investors, Job Seekers
Further, while November's 120,000 job total was not the 150,000 to 200,000 new jobs per month that the U.S. economy needs to substantially lower the unemployment rate, the long-term trend is providing encouragement to institutional investors, business executives, and job seekers alike.
Why are institutional investors encouraged? These investment professionals are watching the revision(s) to the prior months' job total data from the U.S. DOL, and with that focal point in mind, the economy is improving. As noted, the DOL revised the September job total up again -- to an impressive 210,000 job gain from the previously-released 158,000. If that upward revision trend endures and the economy continues to add more than 200,000 jobs per month, that would push earnings substantially higher in the quarters and year ahead -- and that's ultimately what institutional investors want. Hence, along with December job total data to be released in a month, institutional investors will also have their eyes on October's second revision.
Why are business executives encouraged? Through the end of summer, many corporate executives held-off hiring, on concern the U.S. economic recovery would stall, due to sluggish aggregate demand and on concern that Europe's sovereign debt crisis would tip both Europe and the U.S. economies back into a recession. But now that the economy has logged monthly job gains of 210,000 in September, 100,000 in October and 120,000 in November, and with both manufacturing and auto sales showing a strengthening economy, more executives will be willing to commit to new projects and hire additional employees to staff those operation expansions.
If you concluded that the above sounds like, executives move in herds, you're correct. In theory, business decisions are made based on individual company circumstance. In reality, executives tend to move in herds -- delaying projects because other firms are delaying them; then suddenly deploying capital and hiring new employees, after other companies -- particularly direct competitors do so -- out of concern that their company will fall behind the competition if they don't. In sum, the three-month better than 100,000 per month job gain will be enough to get more executives to hire, once they sense that other companies around them are hiring.
Why are job seekers encouraged? Simply, November's 120,000 job gain provides more evidence that the nation's job drought is ending. The 2007-2009 Great Recession triggered the biggest job loss since the Great Depression of the 1930s. As a result, the nation is still short about 13.3 million jobs, according to the most conservative measure: it's short many millions more, if one includes unemployed Americans technically not counted as unemployed because they are not looking for work.
Hence, from a job seeker standpoint, the three-month job growth trend is not nearly enough to change the work sought / job openings ratio, but the United States has to start somewhere.
In other words, as the Wall Street axiom goes, Not in a week, not in a month, not in a quarter, will every American looking for work find it and the U.S.'s job shortage end, but the U.S. economy's stronger job growth trend beats the alternative.