Economics

Here’s where the jobs are for November 2024 – in one chart

Published

3 months ago

December 6, 2024

The jobs report for November came in better than expected, and that growth came from several different areas of the U.S. economy, according to the data.

Health care and social assistance led the way yet again last month, seeing 72,300 new positions added in that area, per the Bureau of Labor Statistics. This comes after the group had the biggest contribution in October.

When including private education with the health-care category, as some economists do, the group’s growth would have increased even more to 79,000.

Leisure and hospitality had the second-biggest contribution last month, with 53,000 positions added. That also marks significant growth compared to its performance in October. The November gains were supported by employment in food services and drinking places, which trended up by 29,000.

Meanwhile, government – a category that had the second-biggest contribution two months ago – came in just behind leisure and hospitality last month. In November, the group grew by 33,000 jobs.

More notably, there was a stark rebound in manufacturing and professional and business services – two areas that suffered major losses in October as a result of the seven-week Boeing machinist strike and the impacts of Hurricanes Helene and Milton. Last month, those categories saw gains of 22,000 and 26,000 jobs, respectively.

“After a prior month of hurricanes and worker strikes, we did get a bounce back in the headline payroll numbers plus positive revisions,” Byron Anderson, head of fixed income at Laffer Tengler Investments, said in a statement. “Jobs creation may not be as robust as in the past years, but we are not seeing a disaster in the job market.”

While there were some gains in other areas as well like construction, Julia Pollak of ZipRecruiter noted that the gains are “very narrowly” concentrated and told CNBC that the growth in manufacturing is actually smaller than she expected to see.

Retail trade, which lost 28,000 jobs, was also a key weak spot of the report. And unless there’s a turnaround in other sectors soon, Pollak believes the pace of overall job growth will “slow further.”

“Some people are calling this a bounce back, [but] I think one should not be misled by the seemingly healthy payroll gain,” the firm’s chief economist said in an interview. “We always knew going in that this report would overstate the underlying strength of the labor market [and] be inflated by the return of workers following strikes and storms.”

On the other hand, Pollak pointed to financial activities as one bright spot in particular. That group experienced a gain of 17,000 jobs in November.

“Banks are getting … sort of bullish and excited about a Trump administration, which is seen as likely to relax financial regulations and take a more favorable approach towards mergers and acquisitions,” she added. “So, that is definitely one sector where we’re seeing more optimism and a bit more hiring in some places.”

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Economics

Germany’s election will usher in new leadership — but might not change its economy

Published

1 day ago

February 21, 2025

Business Finance News

Production at the VW plant in Emden.

Sina Schuldt | Picture Alliance | Getty Images

The struggling German economy has been a major talking point among critics of Chancellor Olaf Scholz’ government during the latest election campaign — but analysts warn a new leadership might not turn these tides.

As voters prepare to head to the polls, it is now all but certain that Germany will soon have a new chancellor. The Christian Democratic Union’s Friedrich Merz is the firm favorite.

Merz has not shied away from blasting Scholz’s economic policies and from linking them to the lackluster state of Europe’s largest economy. He argues that a government under his leadership would give the economy the boost it needs.

Experts speaking to CNBC were less sure.

“There is a high risk that Germany will get a refurbished economic model after the elections, but not a brand new model that makes the competition jealous,” Carsten Brzeski, global head of macro at ING, told CNBC.

The CDU/CSU economic agenda

The CDU, which on a federal level ties up with regional sister party the Christian Social Union, is running on a “typical economic conservative program,” Brzeski said.

It includes income and corporate tax cuts, fewer subsidies and less bureaucracy, changes to social benefits, deregulation, support for innovation, start-ups and artificial intelligence and boosting investment among other policies, according to CDU/CSU campaigners.

“The weak parts of the positions are that the CDU/CSU is not very precise on how it wants to increase investments in infrastructure, digitalization and education. The intention is there, but the details are not,” Brzeski said, noting that the union appears to be aiming to revive Germany’s economic model without fully overhauling it.

“It is still a reform program which pretends that change can happen without pain,” he said.

Geraldine Dany-Knedlik, head of forecasting at research institute DIW Berlin, noted that the CDU is also looking to reach gross domestic product growth of around 2% again through its fiscal and economic program called “Agenda 2030.”

But reaching such levels of economic expansion in Germany “seems unrealistic,” not just temporarily, but also in the long run, she told CNBC.

Germany’s GDP declined in both 2023 and 2024. Recent quarterly growth readings have also been teetering on the verge of a technical recession, which has so far been narrowly avoided. The German economy shrank by 0.2% in the fourth quarter, compared with the previous three-month stretch, according to the latest reading.

Europe’s largest economy faces pressure in key industries like the auto sector, issues with infrastructure like the country’s rail network and a housebuilding crisis.

Dany-Knedlik also flagged the so-called debt brake, a long-standing fiscal rule that is enshrined in Germany’s constitution, which limits the size of the structural budget deficit and how much debt the government can take on.

Whether or not the clause should be overhauled has been a big part of the fiscal debate ahead of the election. While the CDU ideally does not want to change the debt brake, Merz has said that he may be open to some reform.

“To increase growth prospects substantially without increasing debt also seems rather unlikely,” DIW’s Dany-Knedlik said, adding that, if public investments were to rise within the limits of the debt brake, significant tax increases would be unavoidable.

“Taking into account that a 2 Percent growth target is to be reached within a 4 year legislation period, the Agenda 2030 in combination with conservatives attitude towards the debt break to me reads more of a wish list than a straight forward economic growth program,” she said.

Change in German government will deliver economic success, says CEO of German employers association

Franziska Palmas, senior Europe economist at Capital Economics, sees some benefits to the plans of the CDU-CSU union, saying they would likely “be positive” for the economy, but warning that the resulting boost would be small.

“Tax cuts would support consumer spending and private investment, but weak sentiment means consumers may save a significant share of their additional after-tax income and firms may be reluctant to invest,” she told CNBC.

Palmas nevertheless pointed out that not everyone would come away a winner from the new policies. Income tax cuts would benefit middle- and higher-income households more than those with a lower income, who would also be affected by potential reductions of social benefits.

Coalition talks ahead

Following the Sunday election, the CDU/CSU will almost certainly be left to find a coalition partner to form a majority government, with the Social Democratic Party or the Green party emerging as the likeliest candidates.

The parties will need to broker a coalition agreement outlining their joint goals, including on the economy — which could prove to be a difficult undertaking, Capital Economics’ Palmas said.

“The CDU and the SPD and Greens have significantly different economic policy positions,” she said, pointing to discrepancies over taxes and regulation. While the CDU/CSU want to reduce both items, the SPD and Greens seek to raise taxes and oppose deregulation in at least some areas, Palmas explained.

The group is nevertheless likely to hold the power in any potential negotiations as it will likely have their choice between partnering with the SPD or Greens.

“Accordingly, we suspect that the coalition agreement will include most of the CDU’s main economic proposals,” she said.