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The U.S. economy added 227,000 jobs in November, a strong rebound after last month’s total employment decline due to hurricanes and the Boeing strike.
Friday’s figure, released by the Bureau of Labor Statistics, beat the consensus forecast of 200,000 by economists surveyed by Reuters.
It marked a giant leap from the downward contortion of the 12,000 new positions was initially recorded in October. That number was revised higher to 36,000 in Friday’s data release.
The unemployment rate gradually increased to 4.2%.
The jobs report is one of the last major data releases before Federal Reservemeeting on December 17-18, where they will decide whether to proceed with a third consecutive rate cut.
Although Friday’s figures beat forecasts, analysts said they were not strong enough to undermine the possibility of an eventual rate cut this year.
“There is nothing in this release that would prevent the FOMC from cutting [this month]said Ian Lyngen, head of US interest rates strategy at BMO.
“From a Fed perspective, we are seeing a slight deceleration in labor market dynamics and still not a lot of inflationary pressure coming from the labor market,” added Gregory Daco, chief economist at EY.
“So I think they will do additional rate cuts,” he added.
Treasury yields fell as investors bet that a Federal Reserve interest rate cut this month became more likely. Interest rate futures imply an 85% cut, up from 70% just before the data was released.
The two-year yield, which reflects interest rate expectations, fell 0.06 percentage point, to a five-week low of 4.09%.
The S&P 500 rose 0.3% in early trading.
Recent data shows the US economy remains strong and inflation is at risk of exceeding the Fed’s 2% target, making policymakers wary of lowering interest rates too quickly.
Fed Chairman Jay Powell said this week that the Fed may be “a little more cautious” in cutting interest rates because the US economy is in “very good shape” and inflation has risen a little higher than previously predicted.
His fellow governor, Christopher Waller, warned that progress on disinflation “may be stalling,” although he added that he support the December cuts.
A quarter-point reduction this month would lower the target range for the federal funds rate to 4.25 to 4.5%.
Friday employment figures In contrast to October’s total, this was the Biden administration’s worst report to date, as two deadly storms in the Southeast and a Boeing strike took a toll on survey responses and the real economy.
On Tuesday, data showed job openings rose to 7.7 million as the layoff rate fell to its lowest since June. The number of Americans quitting their jobs rose to the highest level since May.
The figures showed the labor market was stabilizing, easing officials’ earlier concerns that it was weakening too quickly.
Over the past year, the US economy created an average of 186,000 jobs per month. In November, healthcare, leisure, hospitality and government were among the sectors reporting the largest increases.
Jobs in the transportation manufacturing sector increased by 32,000, thanks to the end of the Boeing strike.
Retail sector lost 28,000 jobs in November Employment growth was flat for construction as well as for financial activities and professional and business services.
