Andrew Samwick reads the November employment report:

Vox Baby: November Employment : The top line numbers for this morning's November employment report are net 215,000 payroll jobs added... only some fortunate rounding prevented the [unemployment rate] number from ticking up by a tenth (4.95 to 5.04 percent).... Over the past 12 months, the economy has added about 2 million payroll jobs. The 215,000 number doesn't excite me this month, because the private workweek fell by 0.1 hour. As I've noted in past discussions, that reduction in the workweek offsets the added labor input of about 300,000 new workers (134 million total x 80% in private production or non-supervisory jobs x 0.1 hour reduction / 33.8 hours on average). So overall, the economy didn't appear to increase its demand for labor input to production in November. The reduction in the workweek changed a small increase in hourly wages to a small decrease in average weekly earnings, even measured in nominal rather than real terms.

The most interesting feature of this month's report is the information from some special questions in the household survey on persons displaced by Hurricane Katrina... split evenly between those now in the same residence as in August and those in a different residence than in August. The employment-to-population ratios are 46.1 and 41.6 percent for the two groups, respectively, compared to a national figure (not seasonally adjusted) of 62.9 percent. If the national figure is a reasonable proxy for what the Gulf Coast might be experiencing absent the hurricanes, that suggest continued unused labor capacity of about 30 percent (1 - ((46.1+41.6)/2)/62.9) among those people evacuated.

Falling real labor earnings are *not* a sign of an economy near full employment.