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, while the Dow Jones consensus forecast was for 214,000. Nonfarm payrolls increased by 227,000 this month.
However, the unemployment rate rose slightly to 4.2% as expected. Unemployment rose as labor force participation declined slightly and the labor force itself declined. A broader measure that includes discouraged workers and those working part-time for financial reasons saw the share rise slightly 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 continue to rise, with average hourly earnings up 0.4% from a month ago and 4% from the 12-month period. Both figures were 0.1 percentage points higher than expected.
Stock futures were slightly higher after the report, while Treasury yields were lower.
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, Federal Reserve 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 in mid-2022, prices have been rising in recent months. Meanwhile, the October jobs report and various other reports suggest 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 point.
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