Job creation rose in November from a near standstill the previous month as the effects of a significant labor strike and severe storms receded in the Southeast. Bureau of Labor Statistics announced on Friday.
Farm payrolls rose 227,000 in the month, compared with a revised 36,000 increase in October and the Dow Jones consensus estimate of 214,000. The payroll count for September was also revised upward to 255,000, up 32,000 from the previous estimate. Due to the impact of Hurricane Milton, the number of October was maintained Boeing the strike
The unemployment rate rose to 4.2%, as expected. Unemployment figures rose, labor force participation rates fell, and the labor force itself shrank. A broader measure that includes discouraged workers and those in part-time jobs for economic reasons rose slightly to 7.8%.
The data will likely give the Federal Reserve the green light to cut interest rates this month.
“The economy continues to deliver gains in jobs and incomes, but the rising unemployment rate dampens the labor market’s luster a bit and gives the Fed what it needs to cut rates in December,” said Ellen Zentner. 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 seen steady payroll growth in recent years. Social assistance added 19,000 to the total.
At the same time, retail sales fell by 28,000 during the holiday season. Since Thanksgiving is coming later than usual this year, some stores may refuse to stock it.
Workers’ wages continued to rise, with average hourly earnings up 0.4% from a month ago and up 4% over 12 months. Both numbers were 0.1 percentage points above expectations.
Stock futures rose after the report, while Treasury yields were lower.
The report includes questions about the state of the labor market and how that will affect the Federal Reserve’s decisions on interest rates.
Traders accelerated their bets on a rate cut after the payrolls release, with market-implied odds of a quarter-percentage point cut rising above 88%. when central bank officials make their next decision on December 18.
“This morning’s data was a Thanksgiving buffet, with payrolls in place, positive reviews, but unemployment rising despite a drop in the participation rate,” said Lindsay Rosner, head of multi-service investments at Goldman Sachs Asset Management. “This print doesn’t kill the holiday spirit and the Fed remains on track to cut in December.”
Earlier this week, Fed Chairman Jerome Powell said that the generally strong state of the economy gives him and his colleagues the ability to be patient in making interest rate decisions. Other officials said they see additional interest rate cuts as likely but that there could be changes in economic data.
Although inflation is simmering away from a 40-year high in mid-2022, prices have shown to be on the rise in recent months. At the same time, the October employment report and several other reports pointed to a still growing but slowing labor market.
The household survey used to calculate the unemployment rate painted a different picture than the establishment survey of wage earners.
According to the BLS, domestic employment fell by 355,000 in the month, although the labor force was up 193,000. The labor force participation rate, which measures the share of the working-age population that is working or looking for work, fell to 62.5%, down 0.1 percentage point.
Full-time workers decreased by 111,000, and part-time workers by 268,000.
The unemployment rate for black workers rose to 6.4%, an increase of 0.7 percentage points.
