INDIANA – The November Jobs Report is notable for what appears to be a disappointing top-line jobs number — with a monthly growth of just 210,000. This comes from the establishment survey of businesses.
“However, there is evidence that this understates job growth,” according to Dr. Michael Hicks, director of the Center for Business and Economic Research at Ball State University. “Bottom line is that with earlier revisions, this jobs report announces an additional 300,000 new jobs, and probably understates the actual value substantially. Expect large revisions in January.”
Here are more of Dr. Hicks’ takeaways from the November Jobs Report. If you have any interest in connecting with Dr. Hicks beyond these comments, please reach out to me and I will be happy to try to facilitate an interview. Thanks!• The household survey reports job growth of 1.1 million over the month. Part of this can be explained by a modest increase in the number of multiple job holders of roughly 85,000 workers. Still, roughly 800,000 more workers claim new jobs last month than do businesses.
• At the same time, this jobs report makes large upward revisions to past jobs numbers, just as we have seen in previous months. These revisions come partially from administrative data on employment.
• A likely source of the discrepancy between the business and household survey is that a disproportionate share of new jobs are being created in new firms that are underrepresented in the establishment survey. This explanation would help explain the large revisions to previous months which we have seen in the most recent reports.
• This explanation is also consistent with the surge in new business creation we’ve seen in 2021.