Jobs Growth Slowing, But Still Above Powell's Pace

Job growth is slowing, but not quickly enough for the Fed's comfort.

• Chair Powell noted Wednesday that "job gains have stepped down from more than 450,000 per month over the first seven months of the year to about 290,000 per month over the past three months. But this job growth remains far in excess of the pace needed to accommodate population growth over time—about 100,000 per month by many estimates." The 100k figure is charted in a line in the accompanying chart, vs historic averages for private payrolls.
• Despite the headline jobs beat in Nov, the 3mma of payroll gains is now down to 272k (from 282k prior).
• This has steadily declined from the recent 3mma peak in July of 405k, but vs the start of the year, the pace has only halved - meaning that a sharp further deceleration over the next few months will be required to show that the pace of job creation is slowing to a steady pace consistent with Powell's price stability criteria.
• Note that the disconnect between the Employment Report's Establishment and Household surveys continued in November, with the latter dropping by 138k, the 2nd straight month of contraction, vs 328k prior.
• Along with lower hours worked, that's probably the biggest argument that the overall report was weaker than the overall figures suggest. But for now, the Establishment numbers carry the most sway.