The U.S. Bureau of Labor Statistics reported on Friday that job creation rebounded in November from a near-standstill last month as the impact of massive strikes and violent storms in the Southeast receded.
Nonfarm payrolls for October were revised up to 36,000, compared with the Dow Jones consensus estimate of 214,000. Nonfarm payrolls increased by 227,000 for the month.
However, the unemployment rate rose slightly to 4.2% as expected. Unemployment rose as the labor force participation rate declined slightly and the labor force itself declined. On a broader measure that includes discouraged workers and those working part-time for financial reasons, the share edged up to 7.8%.
Job growth was concentrated in health care (54,000 jobs), leisure and hospitality (53,000 jobs), and government (33,000 jobs), which have led wage growth over the past few years.
Meanwhile, retail trade fell by 28,000 people heading into the holiday season. Since Thanksgiving is later than usual this year, some stores may be delaying hiring.
Workers’ wages continued to rise, with average hourly wages rising 0.4% from a month ago and 4% from 12 months ago. Both figures were 0.1 percentage points higher than expected.
After the report was released, stock market futures edged higher and Treasury yields fell.
The report raised questions about labor market conditions and how that will affect the Fed’s interest rate decisions.
After the non-farm payrolls data was released, traders accelerated their bets on interest rate cuts, with the market’s implied probability of an interest rate cut rising to more than 88%. Central bank policymakers will make their next decision on December 18.
Earlier this week, Fed Chairman Jerome Powell said generally strong economic conditions allowed him and his colleagues to be patient as they make interest rate decisions. Other officials said they believed further rate cuts were likely but would be affected by changes in economic data.
Although inflation is well away from 40-year highs by mid-2022, prices have been rising in recent months. Meanwhile, the October jobs report and various other reports showed that the labor market is still growing but slowing.
The household survey used to calculate the unemployment rate paints a similar picture to the establishment survey that provides overall employment numbers.
Household employment increased by 174,000 this month, according to the Bureau of Labor Statistics, even as the labor force shrank 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%, a decrease of 0.1 percentage points.
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