The U.S. economy added 227,000 nonfarm jobs in November, beating expectations of 214,000 and rebounding from the hurricane-hit 36,000 in October. The Bureau of Labor Statistics (BLS) reported a higher-than-expected figure on Friday, alongside an increase in the unemployment rate to 4.2%, as expected.
Non-agricultural payrolls
The BLS releases monthly data as part of its Employment Situation Report. Nonfarm payrolls are a key indicator, measuring the total number of paid workers, excluding agricultural workers (their seasonal structure can give a distorted view of broader economic trends).
This month’s addition of 227,000 jobs marks a significant rebound from October’s 36,000, but remains lower than September’s 255,000.
By sector:
- Health: +54,000 jobs
- Leisure and hospitality: +53,000 jobs
- Government: +33,000 jobs
- Social assistance: +19,000 jobs
However, retail shed 28,000 jobs heading into the holiday season.
The average hourly wage increased 0.4% month-on-month and 4% year-over-year, slightly exceeding forecasts.
However, despite job creation, the unemployment rate increased to 4.2%. In other words, the number of job seekers has increased faster than the number of jobs created.
Consequences
November’s gains reflect easing disruptions caused by Hurricane Milton in October (which made landfall in Florida on October 10) and the Boeing strike (September 13 to November 4). Employment in transportation equipment manufacturing rebounded as striking Boeing workers returned to work.
Market analysts view the data as a green light for the Federal Reserve to implement another interest rate cut at its Dec. 18 meeting. Market-implied odds of a 25 basis point cut jumped above 88% following the report. The Fed has already cut rates by 50 basis points in September and 25 in November.
Ellen Zentner, chief economic strategist at Morgan Stanley, said: “The economy continues to produce a significant amount of jobs and income, but a further rise in the unemployment rate is dampening some of the shine in the job market and gives the Fed what it wants. must cut rates in December.
Reaction
Stock futures rose, reflecting investor optimism.
Treasury yields have fallen, consistent with the increased likelihood of a rate cut.
The US dollar weakened slightly as markets anticipated further easing.
