WASHINGTON — The Coalition for a Prosperous America (CPA) today announced that the U.S. Private Sector Job Quality Index (JQI) is now 82.91, down by 0.47% compared to last month. Meanwhile, the overall November 2024 Jobs Report from the government’s Bureau of Labor Statistics showed 227,000 jobs added in November. This figure is slightly above expectations from most economists. Furthermore, hourly wages also increased a solid 0.37%. Nonetheless, the unemployment rate ticked upward to 4.2%.
The November JQI fell substantially, decreasing by about 0.5%. One of the major reasons behind this decline is falling wages for Electrical equipment manufacturing and Support activities for air transportation. These wages fell by 1.3% and 1.7% in October respectively, pushing these two job sectors from the category of high quality, high paying jobs into the bottom half of the income distribution. Other low quality, low paying jobs also experienced significant wage declines in October, including Performing arts companies (down 5.1%) and Business support services (down 4.2%). Moreover, the largest job gains were also in low quality, low wage job sectors. These sectors include Home health care services (up 16,300 jobs) and Offices of other health practitioners (up 8,300 jobs).
The November employment numbers are a big bounce back from the October report. Originally, the Bureau of Labor Statistics reported only 12,000 jobs added in October. This figure has now been revised upwards slightly to 36,000 jobs created last month, still an extremely low growth month. Of the 227,000 jobs added in November, 194,000 were private sector jobs and 35,000 are from state and local governments.
The November jobs report also showed the largest manufacturing job gains in the past year, with 22,000 jobs added in November. However, this large increase is largely attributable to the return of Boeing workers after the Boeing strike. The gains do not make up for even half of the 48,000 manufacturing jobs lost in October.
The overall job report is likely consistent with what the Federal Reserve was expecting and supports the Federal Reserve’s assessment that interest rates are still too restrictive. The latest data suggests the Federal Reserve will likely continue with rate cuts, likely bringing down rates by another 25-basis-points in December.
The JQI, developed by CPA in partnership with other economists, divides the U.S. private sector nonmanagement labor force of 109.6 million employees into 16 sectors and 164 subsectors to evaluate economic trends in national employment. Sectors where the average weekly wage is above the average weekly wage for this group are termed “high-quality jobs” and those below are “low-quality jobs.” The data shows that for over 30 years the U.S. economy has created more low-quality jobs than high-quality.
Among high quality jobs, the sector with the largest job gains in October was Hospitals (up 12,500 jobs), but this was more than countered by job losses in sectors like Transportation equipment manufacturing (down 49,000 jobs). These job losses were mostly attributable to the Boeing strike so a large portion of these jobs will likely return in the November detailed job numbers. High quality job wages are up slightly, bumped up by wage increases in sectors such as Computer systems design & related services (up 1.5%) and Hospitals (up 0.7%) outpacing falling wages in sectors like Agencies, brokerages, and other insurance related activities (down 0.8%).
The Manufacturing sector experienced losses in both total employment and wages in October. The high quality job sector Transportation equipment manufacturing was behind nearly all the job losses (49,000) due to the Boeing strike. Outside of the Boeing-related job losses, high quality manufacturing jobs increased overall, with gains sectors like in Chemical manufacturing (2,900 jobs gained) and Nonmetallic mineral product manufacturing (1,200 jobs gained) overshadowing losses in sectors like Fabricated metal product manufacturing (2,100 jobs lost).
Low quality manufacturing job growth was flat. Printing & related manufacturing added 1,800 jobs, while almost all other low quality manufacturing job sectors posted moderate job losses, with Electrical equipment manufacturing (down 700 jobs) seeing the most losses. Wages for low quality manufacturing jobs fell in October. Furniture and related product manufacturing was the only low quality manufacturing sector to post positive wage growth at 0.25%. The largest wage losses came from Textile mill manufacturing (down 2.7%), Apparel manufacturing, (down 1.6%), and Electrical equipment manufacturing (down 1.3%).
Figure 1. Job Quality Index 1990-2024
