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Chart of the Month | Jobs Across the Country

December 12, 2019  | by Ryan Driscoll

Market Commentary

The November non-farm payrolls report far exceeded investor expectation and bolstered the perception that the domestic economy continues to grow more than a decade into this recovery. Payrolls were up 266,000 in November, well ahead of expectations. The reading follows a 156,000 gain in October. After revisions, the average pace of job gains in the last three months was 205,000. Notably, the resolution of the General Motors strike inflated the November payroll gain. Returning workers following a 40-day walkout boosted employment in motor vehicles and parts by 41,000 in November.

Nevertheless, the jobless rate fell to 3.5 percent, while the participation rate fell by just 0.1 percentage point to 63.2 percent. The small drop in the participation rate comes in the context of a strong advance in the second half of 2019, leaving an upward trend intact as firmer wage growth pulls potential workers off the sidelines. Greater labor supply serves to extend the expansion by keeping wage and inflation pressures in check.

Perhaps, one of the more encouraging aspects of domestic employment growth is how evenly distributed job creation has been across the country. The national unemployment rate is very representative of the individual states, with just a few exceptions. Among those states with unemployment higher that 4.5 percent (dark blue), the highest unemployment rate is in Alaska with a 6.6 percent. The others in this cohort top out at 5.5 percent, which is still reasonable by historical standards.

Jobs Across the Country

Source:  U.S. Bureau of Labor Statistics

Authors

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Ryan Driscoll is a member of the Commonfund Asset Management Investment team and is primarily responsible for investment monitoring, rebalancing and reporting for investment portfolios with a focus on operating assets. Prior to joining Commonfund, Ryan worked at Sailfish Capital Partners, a multi-strategy fixed income fund, where he served on the Emerging Markets team. Prior to that, he was on the fixed income team at Grantham, Mayo, Van Otterloo & Co. and was an equity/fixed income trader at Loring, Wolcott and Coolidge, in Boston. Ryan received his B.S. in Finance and M.S. in Global Financial Analysis (with Distinction) from Bentley University. He is a CFA Charterholder and is a member of the Boston Securities Analyst Society and CFA Institute.
Ryan Driscoll
Director, CFA
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Disclaimer

Information, opinions, or commentary concerning the financial markets, economic conditions, or other topical subject matter are prepared, written, or created prior to printing and do not reflect current, up-to-date, market or economic conditions. Commonfund disclaims any responsibility to update such information, opinions, or commentary. To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated in this material. Forecasts of experts inevitably differ. Views attributed to third parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Managers who may or may not subscribe to the views expressed in this material make investment decisions for funds maintained by Commonfund or its affiliates. The views presented in this material may not be relied upon as an indication of trading intent on behalf of any Commonfund fund, or of any Commonfund manager. Market and investment views of third parties presented in this material do not necessarily reflect the views of Commonfund and Commonfund disclaims any responsibility to present its views on the subjects covered in statements by third parties. Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Commonfund fund. Such statements are also not intended as recommendations by any Commonfund entity or employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information. Past performance is not indicative of future results. For more information please refer to Important Disclosures.