Last Friday’s November nonfarm payrolls release was far more positive than the market – or I – expected. The headline numbers portrayed a significant improvement in the labour market situation, or, at least, a decline in the pace of deterioration. The unemployment rate was down from 10.2% in October to 10.0% in November, and nonfarm payrolls decreased by just 11,000 (versus an average of 135,000 per month in the previous three months and a peak of 741,000 in January 2009).

Still, a couple of charts (Click to enlarge) are worth considering before jumping to conclusions.

US Labour Force Participation Rate (%)

• The drop in the unemployment rate was basically accounted for by a falling rate of participation in the labour market, which hit 65.0%, the lowest since 1986.
  

  U-6 Unemployment Rate (%)

• The U-6 rate of ‘total unemployed, plus all marginally attached workers plus total employed part time for economic reasons’ came down a bit from 17.5% to 17.2%, but is still pretty high and not turning very quickly. There’s still a lot of pain out there.
  

  Change In Non-Farm Payrolls By Category

• The good news, aside from the falling unemployment number? Temporary jobs are picking up, which is typically a good leading indicator for overall job creation (companies will hire temps before they are fully convinced that new customer demand is for real).

On the whole, a mixed picture. But a slightly brighter holiday season for jobseekers nonetheless.