Job creation rebounded in November from the previous month’s near-stagnation as the effects of large-scale labor strikes and severe storms in the Southeast receded, the Bureau of Labor Statistics said Friday.
Nonfarm payrolls increased by 227,000 in the month, compared with an upwardly revised 36,000 in October and the Dow Jones consensus estimate of 214,000.
However, the unemployment rate rose slightly to 4.2%, as expected. Unemployment rose as the labor force participation rate gradually declined and the labor force itself shrank. The broader measure, which includes disengaged workers and those in part-time work for financial reasons, rose to 7.8%.
Employment growth was concentrated in health care (54,000 jobs), leisure and hospitality (53,000 jobs), and government (33,000 jobs), with these sectors having consistently increased employment over the past few years. It has been driving growth.
At the same time, retail sales fell by 28,000 in the lead-up to the year-end sales season. Since Thanksgiving is later than usual this year, some stores may have decided not to hire.
Workers’ wages continued to rise, with average hourly wages increasing 0.4% month-on-month and 4% on a 12-month basis. Both numbers were 0.1 points higher than expected.
Stock market futures rose slightly on the news, but U.S. Treasury yields fell.
The report includes questions about the state of the labor market and how it affects the Federal Reserve’s interest rate decisions.
Traders accelerated their bets on a rate cut following the salary announcement, with market odds of a quarter-point cut exceeding 88%. Central bank policymakers will make their next decision on December 18th.
Earlier this week, Federal Reserve Chairman Jerome Powell said generally strong economic conditions allow him and his colleagues to be patient in determining interest rates. Other officials said further rate cuts were likely but would depend on changes in economic indicators.
Although inflation has come a long way from its 40-year high in mid-2022, prices have shown to be rising in recent months. At the same time, the October employment report and various other reports point out that the labor market is still growing but slowing.
The household survey used to calculate the unemployment rate paints a similar picture as the establishment survey, which provides the number of major employees.
According to the BLS, household employment increased by 174,000 people in the same month, even as the labor force decreased by 193,000 people. The labor force participation rate, which measures the percentage of the working-age population who are either working or looking for work, fell by 0.1 percentage point to 62.5%.
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