Like a broken record - "modest job creation"

The Labor Department reported another month's worth of modest job growth that should just about guarantee a quarter-point rate cut from the Federal Reserve next week.

November payrolls increased by 94,000 after an upwardly revised gain of 170,000 in October and a downwardly revised increase of 44,000 in September. Notably, while the October revision was +4,000, the September revision was quite large at -52,000.

On a year-over-year basis, a distinct multi-year downward trend continues, however, despite a recent uptick in initial claims for unemployment and a slightly dimmer jobs outlook in consumer confidence surveys, distress in the labor market is largely absent.

When viewed by category, in addition to all the usual areas for job growth - education and health services, leisure and hospitality, and government - both trade and professional services posted strong gains last month.

As expected, construction, manufacturing, and financial activities all saw steep declines and, in general, the November data seems to be just a continuation of the well-established trend of modest, but declining, employment growth led by service industries.

The birth-death adjustments totaled 51,000 for the month, however, since this adjustment is applied to the non-seasonally adjusted increase of 240,000 new jobs for November, there is little reason to think that it skewed the data much.

Over the last year, over 300,000 jobs have been lost in construction, manufacturing, and financial activities, but gains in other categories have more than offset these losses resulting in over 1.4 million new jobs.

This figure is likely to be move downward, perhaps significantly, as part of the annual revision to the Labor Department data in the months ahead, but it will still likely result in "modest" job creation during 2007.