December 2023 Market Trends Report
The U.S. economy added 199,000 jobs in November while the unemployment rate dipped to 3.7 percent, according to the U.S. Bureau of Labor Statistics (BLS) Employment Situation Summary.
The manufacturing sector bounced back with workers returning from a labor strike, showing a growth of 28,000 employees on payrolls. Meanwhile, the construction sector reported a slight spike in employment (+2,000) and the warehousing and storage subsector of transportation and warehousing recorded a slight dip (-8,100) in employment
Job openings rise across industrial sectors
The latest Job Opportunities and Labor Turnover Survey (JOLTS) report, which runs a month behind the U.S. Bureau of Labor Statistics’ jobs report, reported that there were 8.7 million job openings on the last business day of October. Job openings dipped just slightly in manufacturing (-14,000) and construction (-4,000), while openings grew for a third straight month in transportation, warehousing and utilities (+33,000)
Total separations, including quits, layoffs, discharges and other separations, surged in construction (+34,000) and transportation, warehousing and utilities (+29,000), while manufacturing employers reported fewer separations (-13,000) in October.
Jobs Market Overview: November 2023
3.7%
Overall Unemployment Rate
Unemployment fell to 3.7%, marking the 21st consecutive month under 4%
199k
Jobs Added
November marked the 35th consecutive month of job gains.
62.8%
Labor Force Participation Rate
The labor force participation rate inched up, but remains below its pre-pandemic level of 63.4%
Industry Employment Trends
OVERALL ECONOMY
+199k
Monthly Job Change
(+1.8% YoY Difference)
| Industry | Monthly Job Change | YoY Difference |
| Manufacturing | +28k | 0% |
| Automotive | +30k | +3.7% |
| Warehousing & Storage | -8.1k | -3.9% |
| Architectural & Engineering | +5.9k | +3.3% |
| Construction | +2k | +2.6% |
Source: Bureau of Labor Statistics, Employment Situation Summary (bls.gov/news.release/empsit.nr0.htm)
Sector by Sector: November 2023
Manufacturing
The latest survey from the Institute for Supply Management (ISM) shows manufacturing remains slowed. The ISM reported a Manufacturing PMI of 46.7% in November, indicating economic activity contracted in the manufacturing sector for the 13th consecutive month.
Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® Manufacturing Business Survey Committee, said December 1: “The sector is still in the trough.”
Of 17 industries, just three reported growth in November, according to ISM, were: Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; and Transportation Equipment.
Employment in manufacturing as a whole in November was impacted greatly by the return of workers from the United Auto Workers (UAW) strike impacting workers at the Detroit Three automakers. Without a 30,000 increase in employment for motor vehicles and parts employers, manufacturing employment would have been down 2,000 in November.
Construction
While construction job openings and employment held fairly steady in the latest national reports, 2023 has been a busy year for employers and job seekers.
On a year-over-year basis, industry employment has increased by 200,000 jobs (2.6%) and average hourly earnings are up by 4.9%. That 12-month change is ahead of all other private industries by nearly a full percentage point, according to Associated Builders and Contractors.
“Faster hiring in the industry has coincided with worsening labor shortages, and that has led to rapid increases in labor costs,” said ABC Chief Economist Anirban Basu in a news release on December 8.
Nearly 50% of construction employers intend to increase their staffing levels over the next six months according to ABC’s Construction Confidence Index, and just 13.8% intend to downsize. But employers are having a hard time finding talent.
“The steep rise in pay for craft and other hourly workers, along with an earlier report of record job openings heading into November, indicate that contractors are still struggling to find enough skilled workers,” said Ken Simonson, chief economist for the Associated General Contractors of America (AGC). “The slowdown in employment is a sign of how tight the job market is, not an indication that construction demand is lagging.”
Some workers may be taking advantage of rising wages. According to the latest JOLTS report, 35,000 construction workers quit in October.
Warehousing & Storage
The warehousing & storage sector continued its slog in November, reporting another loss of 8,100 jobs.
The loss was reported nearly a month after it was reported that large-scale seasonal hiring announcements were down in 2023. As of November 9, companies had announced plans to hire just 573,000 seasonal workers this year, down 60% from 2021 and the lowest number reported since 2013, according to Challenger, Gray & Christmas.
The Logistics Manager Index (LMI) reflected that slide, reading 49.4 in November – a sharp drop from its 56.5 reading in October. The LMI gathers the responses of more than 100 professionals in the logistics industry to gauge trends and developments over time. A reading under 50 indicates contraction in the industry.
The dip in LMI was attributed by researchers in part to firms selling off inventories over the past month. After suppliers stocked up in October, 200.4 million shoppers made purchases between Thanksgiving and Cyber Monday, according to the National Retail Federation. This was significantly higher than the predicted turnout.
Still, the researchers behind the LMI characterized contraction as mild and good times may be ahead. In a release explaining November’s reading, it was speculated that a potential interest rate reduction in December could jumpstart sleepy aspects of the industry.
“LMI respondents are optimistic about growth in the logistics industry over the next 12 months, the report said. “For that growth to occur it is likely that the predicted relaxation in interest rates will have to have happened first.”