Ills and Chills in November

Payroll employment is expected to rise by 210,000 in November after rising by 261,000 in October. The risks are to the downside. This is usually a time of year when seasonal hiring picks up in the retail and shipping industries, but several major players have announced hiring freezes and some job cuts. The downshift in hiring reflects a pivot by consumers from spending on goods to services but it is unusual unless the economy is in a recession. 

Hiring in health care and leisure and hospitality are expected to drive gains. Hiring in professional business services is expected to slow. A catch-up in production in the vehicle sector is expected to buoy gains in manufacturing employment. 

Average hourly earnings are expected to rise 0.4% in November, the same as in October. That translates to a 4.7% year-over-year gain, also the same as October. Average hourly earnings are slowing. Large retailers, who once placed a floor on how low wages could go, are beginning to place a ceiling on wages at the bottom rung of the income strata. This is the same time that turnover rates, which pushed wages up faster earlier in the cycle, have begun to slow.

Separately, the unemployment rate is expected to hold at 3.7%, the same as we saw in October. That is only slightly above the 3.5% record low hit in September. 

The ranks of those who are out sick and unable to work are expected to pick up from the elevated levels of October. We could easily see 65-70% more people out sick and unable to work in November than we did in the 2010s before the onset of the pandemic. The ranks of those who are out due to childcare problems are expected to hit another record in November, as infections due to RSV, the flu and COVID among kids continue to spike; pediatric ICU units have been struggling to keep up with the influx of patients.