Nonfarm payroll employment clocks in substantially above consensus (Bloomberg: mean 230,000, range 140,000 to 275,000), solidifying trend growth. Previous months' estimates revised upward. Wages continue to rise, but labor costs in productivity adjusted terms are stable.

Figure 1: Log nonfarm payroll employment as estimated by the BLS in the establishment survey (blue), and as estimated by the BLS in the household survey, adjusted to conform to the NFP concept (red), and private nonfarm payroll employment as estimated by the BLS in the establishment survey (green), and index of average weekly hours for production and nonsupervisory workers as estimated by the BLS in the establishment survey (black), all seasonally adjusted by the BLS, normalized by the author to 2007M12=0. Recession dates as estimated and defined by the NBER Business Cycle Dating Committee shaded gray. Source: BLS via FRED, BLS, NBER, and author's calculations.

Figure 2: Nonfarm payroll employment as estimated by the BLS in the establishment survey November release (blue), October (red), September (green), August (black), and July (teal). Source: BLS via FRED.

Figure 3: Log average hourly earnings for production and nonsupervisory employees, as estimated by the BLS in the establishment survey November release, and log CPI-all (red), both normalized to 2009M06=0. Recession dates as estimated and defined by the NBER Business Cycle Dating Committee shaded gray. Source: BLS via FRED, NBER and author's calculations.

While hourly pay appears to be rising faster than the CPI-all (including energy and food), it's important to recall that inflationary pressures from the labor sector will only manifest in overall price inflation only if (i) unit labor costs also increase, and/or (ii) inflationary expectations become unanchored (of which there is little evidence thus far). Figure 4, derived from the costs and productivity release (revision released a couple days ago) indicates little upward pressure — see the green line below.