The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in November.

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“The BLS released two months of payroll employment data today, along with the household survey data for November. The net is that the job market is softening more rapidly than markets had anticipated, but in line with MBA’s forecast.

“The key phrase from the BLS is that payroll employment ‘has shown little net change since April.’ Job gains in some months have been offset by job losses in others. This was true in the past two months, with a decline of 105,000 in employment in October offset by an increase of 64,000 in November. The job losses in October were largely due to a decline of a 162,000-loss in federal government employment under the deferred resignation program. So far this year, federal government employment is down by 271,000. Employment figures for August and September were revised down a combined 33,000 with this release.

“In November, most of the employment increase was in just two sectors. There was a 64,000 increase in health care and social assistance, and a 28,000 increase in construction. Employment was relatively flat or showed small losses in most other sectors.

“The most significant news from this report was the increase in the unemployment rate to 4.6% in November from 4.4% in September, noting that there will not be an estimate for October. The number of unemployed individuals increased from 7.6 million in September to 7.8 million in November. Beyond this, underemployment spiked. The U6 jumped from 8.0 in September to 8.7 in November. 5.5 million people are working part-time but would prefer a full-time job. This category increased by 909,000 from September to November and is one of the drivers of the U6 increase.

“To round out the report, over the past 12 months, average hourly earnings have increased by 3.5 percent.

“FOMC members who voted last week for an additional rate cut received support for that action, given these signs of a weaker job market. Inflation data later this week will be the other key driver of future monetary policy steps. Mortgage rates are likely to be little changed by this news.”