Job creation in November rebounded from a near-flat level the previous month as the impact of a large-scale labor strike and severe storms in the Southeast subsided, Bureau of Labor Statistics Friday report.
Nonfarm payrolls increased 227,000 in the month, compared with an upward revision of 36,000 in October and the Dow Jones consensus estimate of 214,000. The number of payrolls in September was also adjusted up, to 255,000, an increase of 32,000 compared to the previous estimate. October’s numbers were hampered by the impact of Hurricane Milton and Boeing beat.
The unemployment rate rose to 4.2%, as expected. Unemployment numbers rise as the labor force participation rate declines and the labor force itself declines. A broader measure that includes discouraged workers and those taking part-time jobs for economic reasons rose slightly higher to 7.8%.
This data could give the Federal Reserve the green light to lower interest rates later this month.
“The economy continues to create strong jobs and healthy earnings growth, but further increases in the unemployment rate will temper some of the optimism in the labor market and give the Fed some What do they need to cut interest rates in December? Chief economic strategist at Morgan Stanley Wealth Management.
Job gains were concentrated in health care (54,000), leisure and hospitality (53,000) and government (33,000), sectors that have consistently led wage growth over the past few years. Social assistance added 19,000 to the total.
At the same time, retail transactions saw a decline of 28,000 heading into the holiday season. With Thanksgiving coming later than usual this year, some stores may have stopped hiring.
Workers’ wages continued to rise, with average hourly earnings up 0.4% from a month ago and 4% on a 12-month basis. Both numbers were 0.1 percentage points higher than expectations.
Stock market futures rose after the report while Treasury yields were lower.
The report raises questions about the state of the labor market and how that will impact the Federal Reserve’s decisions on interest rates.
Traders accelerated bets on a rate cut after the payrolls were released, with market-implied odds rising above 88% for a quarter-percentage-point cut. when central bank policymakers make their next decision on December 18.
Lindsay Rosner, head of multi-service investing at Goldman Sachs Asset Management, said: “This morning’s data was a Thanksgiving buffet with payrolls released, positive adjustments, but rates Unemployment remains higher despite falling participation rates.” “This print doesn’t kill the holiday spirit and the Fed is still on track to deliver a cut in December.”
Earlier this week, Fed Chairman Jerome Powell said the economy’s strong overall condition gives him and his colleagues the ability to be patient when making interest rate decisions. Other officials said they see additional rate cuts as possible but depending on changes in economic data.
While inflation has gradually eased from a 40-year high in mid-2022, recent months have shown prices rising. At the same time, the October jobs report and many other reports have shown that the labor market is still growing but slowing down.
The household survey, used to calculate the unemployment rate, painted a different picture from the baseline survey that provided headline payroll figures.
According to the BLS, household employment fell by 355,000 during the month even as the labor force fell by 193,000. The labor force participation rate, which measures the proportion of the working-age population working or looking for work, fell to 62.5%, down 0.1 percentage points.
Full-time workers fell by 111,000 while part-time workers fell by 268,000.
The unemployment rate for black workers increased to 6.4%, an increase of 0.7 percentage points.
