In his latest commentary, the National Restaurant Association's Chief Economist Bruce Grindy breaks down the latest jobs report. The economy appears to be gaining a little momentum into 2014, as the labor market has registered consistent improvements in recent months. In addition, restaurant operators’ outlook for the economy improved somewhat in November.
New labor market data from the November employment report suggested that the economy may be gaining some momentum as the year closes out, with payroll growth remaining solid and the unemployment rate falling to a post-recession low.
According to preliminary data from the Bureau of Labor Statistics (BLS), the economy added a net 203,000 jobs in November, which marked the third time in the last four months with gains of at least 200,000 jobs. Over the past four months, the economy averaged net gains of 204,000 jobs, which is sufficient growth to put downward pressure on the jobless rate.
Indeed, the unemployment rate did fall to 7.0 percent in November, the lowest level in five years. To be sure, the labor market is far from fully recovered, as nearly 11 million individuals remained unemployed – 4.1 million for more than six months. In addition, over 8 million more are either working part-time for economic reasons or are not looking for work because they believe no jobs are available for them. But overall, the trend is certainly moving in the right direction, albeit much slower than would be expected at this point in a recovery.
Job growth was broad-based in November, as both goods-producing (+44,000) and service-producing (+152,000) sectors registered solid gains. Importantly, manufacturers added a net 27,000 jobs in November, the sector’s strongest gain in 20 months.
For their part, restaurant operators maintained their steady contribution to the recovery. Eating and drinking places added a net 18,000 jobs in November, the 45th consecutive monthly gain for a total of 1.1 million jobs.
During the first 11 months of 2013, eating and drinking places added nearly 300,000 jobs. Driven by these steady gains, restaurant-industry employment is on pace to grow at a robust 3.3 percent rate in 2013 – or more than double the 1.6 percent gain in total U.S. jobs. In addition, 2013 will represent the 14th consecutive year in which restaurant job growth outpaced the overall economy.
Restaurant operators’ outlook for the economy also marginally improved in November. In the National Restaurant Association’s November 2013 Tracking Survey, 27 percent of restaurant operators said they expect economic conditions to improve in six months, while 26 percent expect the economy to worsen. While this outlook is far from rosy, it was certainly an improvement over operators’ sentiment in October, when 19 percent said they expected the economy would improve and 28 percent thought conditions would worsen.
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U.S. Total Non-Farm Job Growth
Source: Bureau of Labor Statistics; figures are seasonally-adjusted