Job creation rebounded from the previous month’s near-stagnation in November 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 same month, compared to an upwardly revised 36,000 in October and the Dow Jones consensus estimate of 214,000. The number of employees for September has also been revised upward to 255,000, an increase of 32,000 from the previous forecast. October numbers are Hurricane Milton and boeing strike.
The unemployment rate rose slightly to 4.2%, as expected. The number of unemployed people increased as the labor force participation rate declined and the labor force itself shrank. The broader measure, which includes disengaged workers and those in part-time work for financial reasons, rose slightly to 7.8%.
This statistic likely gives the Fed the green light to cut interest rates later this month.
“While the economy continues to see healthy job and income gains, further increases in the unemployment rate will dampen some of the shine in the labor market and give the Fed what it needs to cut interest rates in December,” said Ellen Zentner. ” he said. Chief Economic Strategist at Morgan Stanley Wealth Management.
Employment growth was concentrated in healthcare (54,000 jobs), leisure and hospitality (53,000 jobs), and government (33,000 jobs), with these sectors consistently posting the highest employment growth over the past few years. It has been driving growth. Social assistance added 19,000 people to the total.
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 current 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.
“This morning’s numbers were a Thanksgiving buffet, with good salaries and positive revisions, but participation rates were “Despite the decline, the unemployment rate continues to rise.” “This print hasn’t killed the holiday spirit, and the Fed remains on track to cut interest rates in December.”
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, recent months have shown that prices are on the rise. 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 different picture than the establishment survey, which provides the number of major employees.
According to the BLS, household employment decreased by 355,000 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%.
Full-time employment decreased by 111,000 people, and part-time employment decreased by 268,000.
The unemployment rate for black workers rose to 6.4%, an increase of 0.7 points.
