The November employment from the Bureau of Labor Statistics could be taken from a glass-half-full or glass-half-empty perspective. This being “Good News” we’ll take the half-full view. Employers added 120,000 net new payroll jobs in November while the totals for September and October were revised higher by a combined 72,000 according to the BLS’s survey of business establishments. Leading sectors included retail sales (+49,800), professional and business services (+33,000) and education and health services (+27,000) while government subtracted 22,000. 
More surprisingly, the companion household survey revealed that the unemployment rate slipped dramatically from 9.0 to 8.6 percent last month, its lowest level since March 2009. The sharp decline was caused by two factors: the number of employed increased by 278,000 – a good thing – while the labor force shrank by 315,000 as people gave up looking – not so good. The household survey includes self-employed and so does a better job of detecting the early stages of a recovery, but the sample size is smaller so the margin of error is higher.
A couple of other studies suggest that small businesses, which were hit hard by the recession, may be starting to hire again. The National Federation of Independent Business reported a slight increase in the average number of workers per firm, the first gain in nearly half a year. Moreover, a net 7 percent of small business owners plan to create new jobs over the next three months, the highest reading in 38 months.
On Wednesday ADP reported that the labor market added a better-than-expected 206,000 jobs last month. Significantly, small businesses (fewer than 49 employees) added 110,000 of those jobs. Although the ADP report, which is based on the company’s proprietary client data, often does not mirror the monthly BLS numbers, the two correlate closely over time.
Robert Bach SVP – Chief Economist – Grubb & Ellis
