• The US economy added 227,000 jobs in November, a stronger showing than October’s revised total of 36,000.
• That sharply lower tally for October was partly due to striking workers at Boeing and two major hurricanes that prevented the Bureau of Labor Statistics from gathering data in parts of the Southeast.
• The November unemployment rate ticked up to 4.2% from 4.1%, marking the first time since 2021 that it has been at or above 4% for six consecutive months.
Federal Reserve officials are taking the November jobs report with a big grain of salt.
The report, released Friday morning, estimated employers hired 227,000 new workers last month, beating economists’ expectations and surging past October’s dismal 36,000 new hires. But at the same time, the unemployment rate ticked up to 4.2% from 4.1% in October.
“It can be dangerous to focus too much on one release because it may be subject to revisions and reflect idiosyncratic factors like the impact of hurricanes and strikes,” Cleveland Fed President Beth Hammack said Friday at an event hosted by The City Club of Cleveland. Overall, she said recent trends indicate the labor market is getting into better balance from the pandemic, when employers had to contend with shortages.
Chicago Fed President Austan Goolsbee said last month’s job gains were higher than he anticipated, but said he’s not reading too much into it. Instead, he said he’s taking into account recent averages of monthly job gains. In that regard, the labor market is at a level of “sustainable full employment,” Goolsbee said Friday at a conference.
Full employment refers to a situation where labor supply and labor demand are in balance, meaning job seekers are able to find new work with relative ease and employers with open roles can similarly fill positions easily.
Fed Governor Michele Bowman said the labor market’s strength continues to outperform her expectations. In her view, the rise in the unemployment rate over the past year “largely reflects weaker hiring as the layoffs continue to remain low,” she said Friday at an event hosted by the Missouri Bankers Association.
But she cautioned it’s been more challenging for her to get a good read on what’s happening in the labor market from monthly government job reports with frequent substantial revisions as well as immigration effects.
Wall Street was mixed after the November jobs report, with the Dow initially moving higher but then falling by 110 points, or 0.25% by midday. The S&P 500 and Nasdaq Composite both reached new intraday highs.
Traders were reassured by the better-than-expected total of 227,000 jobs added last month, and bets rose for a quarter-point rate cut from the Federal Reserve at the conclusion of its two-day policy meeting on December 18. The unemployment rate, however, rose to 4.2% from 4.1% and the labor force participation rate ticked down.
Overall, the November employment data has “ambiguous implications” that Fed officials will need to parse, said Bill Adams, chief economist at Comerica Bank. “On the one hand, there’s clearly more slack in the job market than a year or two ago — that argues for more rate cuts. On the other hand, wage growth continues to run faster than in the pre-pandemic period, which could sustain inflationary pressures in labor-intensive industries — and that argues against them.”
The government’s latest employment figures show that America’s job market remains in good shape overall.
In the six months through November, employers have added a solid 143,000 jobs a month, on average. Unemployment is up from levels seen a year earlier but remains historically low, hovering within a narrow range over the past several months. Wage growth has continued to outpace inflation.
Here are other trends reflected in the November jobs report:
As part of his campaign to reclaim the White House, President-elect Donald Trump made clear that in a second term in office, he’d move tens of thousands of federal jobs outside the “Washington swamp” and into “places filled with patriots who love America.”
“This,” Trump said in one campaign video, “is how I will shatter the deep state.”
The relocation of federal jobs outside Washington, DC, was something Trump embarked on near the end of his first term — shifting the headquarters of the Bureau of Land Management about 2,000 miles west to Grand Junction, Colorado.
But if that move is any indication of what’s to come, the massive push to relocate federal jobs outside the Beltway comes with the risk of kneecapping agencies through the loss of experienced workers and bogging them down in logistical minutia.
The BLM move became an unproductive debacle marked by an exodus of experienced employees and a surge in vacancies that arguably undermined the then-Trump administration’s agenda, according to a half dozen current and former senior BLM staffers — including the agency’s current director — and a CNN review of government records.
That western relocation was “wildly disruptive” and should serve as a “cautionary tale” for the incoming Trump administration, said Tracy Stone-Manning, the Biden administration’s BLM director.
“It’s years of opportunity cost when we could and should be focused on the work of the bureau, for public lands and the American people, and we had to instead focus on rebuilding the bureau,” Stone-Manning said. “We are still piecing it back together.”
Read more here.
“The labor market is healthy even though it is, in the long term, trending in an unhealthy direction,” Noah Yosif, chief economist for the American Staffing Association, told CNN in an interview Friday.
“What we’re seeing is really a K-shaped duality of outcomes for the labor market: It’s good if you have a job, but it’s very, very difficult if you don’t have a job.”
The unemployment rate ticked up last month to 4.2% from 4.1%, and a growing number of jobless Americans are taking longer to find a job — a reflection of a pullback in hiring. People are staying unemployed, on average, for a little more than five months, the highest duration since April 2022, according to data released Friday.
Americans are continuing to emerge from their yearslong funk.
The University of Michigan’s latest consumer survey, released Friday, showed that sentiment climbed in December for the fifth month in a row, “rising about 3% to its highest reading in seven months,” according to a release.
November’s perkier mood was driven by consumers perceiving favorable buying conditions for durables (goods meant to last at least three years, such as cars and furniture.)
The Federal Reserve has pared back interest rates twice this year so far, and seems to be on track to cut rates again later this month. Durable goods are usually purchased with credit.
“Rather than a sign of strength, this rise in durables was primarily due to a perception that purchasing durables now would enable buyers to avoid future price increases,” said Joanne Hsu, the survey’s director, in a release.
Republicans continued to feel optimistic about the economy, following President-elect Donald Trump’s win for a second term in early November, while Democrats grew more pessimistic.
“Democrats voiced concerns that anticipated policy changes, particularly tariff hikes, would lead to a resurgence in inflation,” Hsu said. “Republicans disagreed; they expect the next president will usher in an immense slowdown in inflation.”
While businesses and others are sounding the alarm about the potential for stark labor shortages and economic risk, one has to go back only a couple of years to see how labor shortages hindered the economic recovery.
“We lived it,” Sam Sanchez, a Chicago restaurateur, told CNN in an interview. “There was no labor force. Everybody was collecting $1,000 a week for a year and a half. People were traveling around the world, and people refused to come to work.”
The pandemic leveled in-person industries, and the restaurant sector was among the hardest hit, losing millions of jobs overnight.
While unemployment benefits were extended to affected workers, the demand for workers outstripped the supply for a variety of reasons, including health and safety concerns, caregiving needs and people switching careers.
It took years for the restaurant industry to return to its pre-pandemic job totals.
Read more here.
Federal Reserve officials expressed greater confidence about America’s job market in the days leading up to Friday’s latest employment data.
The Fed’s so-called dual mandate calls for the central bank to promote maximum employment and stable prices. The job market has steadily slowed throughout 2024, but there were a few rough patches this year. For example, the July jobs report, released in early August, came in much weaker than expected. Some economists said that encouraged the Fed to deliver a large, half-point rate cut in September.
Subsequent data showed unemployment remaining historically low and job growth holding steady (stripping out the distortions to October data from hurricanes and labor strikes.)
Here’s what Fed officials have said recently about the US labor market:
For several months, government hiring has accounted for some of the top gains across all industries.
For instance, last month the government hired 33,000 new workers, making it the third top sector that saw gains in November. Much of the growth in the sector over the past year came from state and local hiring. Part of the equation has also been from the federal government side, where employment has grown and shed very few jobs.
But the government sector as a whole could soon turn into the one experiencing the greatest monthly job losses as Elon Musk and Vivek Ramaswamy, who lead President-elect Donald Trump’s Department of Government Efficiency, pledged to recommend laying off more federal workers.
“The number of federal employees to cut should be at least proportionate to the number of federal regulations that are nullified,” Musk and Ramaswamy said in a recent Wall Street Journal op-ed.
Trump has also vowed to abolish the Department of Education, which could result in layoffs as well.
Currently, more than 3 million people are federal government employees, according to data from the November jobs report. That’s about 37,000 more federal employees compared to a year ago.
Acting Labor Secretary Julie Su touted the November jobs report Friday, telling CNN the October report was “an aberration” and that last month’s data was “much more consistent with what we’ve seen throughout the year, which is a story of continued growth.”
The acting Labor Secretary, however, acknowledged that promising economic indicators did not always translate to consumer confidence under the Biden administration, telling CNN it would take a while for Americans to feel a number of President Joe Biden’s signature economic achievements.
“Working people have been seeing their situation decline for decades — it’s going to take more than four years to reverse that, and it’s going to take more than four years for people to really feel secure again,” she said.
She also said: “We are handing off the strongest economy in history to the next administration.”
The Dow opened 86 points, or 0.2% higher Friday; the S&P 500 moved up by 0.2%, and the Nasdaq Composite gained 0.3%, as investors continue to expect a rate cut from the Federal Reserve this month.
Wall Street parsed the latest jobs report, which showed that the US economy added a better-than-expected 227,000 jobs in November and the unemployment rate rose to 4.2%, according to the Bureau of Labor Statistics.
Traders are betting that despite the slight uptick in the unemployment rate, the Fed will still announce a quarter-point cut in its benchmark interest rate at the conclusion of its two-day policy meeting on December 17-18. However, they reduced their bets to 87% from 91% earlier in the day, according to the CME FedWatch tool.
Wall Street became more confident that the Federal Reserve will cut interest rates again this month after the release of the November jobs report.
Investors’ bets that the Fed will deliver a quarter-point rate cut stood at around 72% before the report’s release at 8:30 a.m. ET, according to the futures market. Those odds were at roughly 87% shortly after the stock market opened.
The Fed seems to be on track to deliver this year’s third rate cut at its December 17-18 meeting mostly because it seems that elevated borrowing costs still have tight grip on the economy, coupled with the belief that inflation is destined to slow further, despite recent inflation data coming in slightly hotter than expected.
When the Fed began to cut in September, Fed Chair Jerome Powell said central bankers want to prevent any deterioration in the labor market. There have been some lingering signs of underlying fragility, such as the concentration of job growth over the past year.
“If you look at private sector job growth, and you exclude health care and education, growth has mainly been driven by hospitality, while other cyclical sectors are not generating a lot of net job gains,” Kathy Bostjancic, chief economist at Nationwide, told CNN. “This concentration of job growth is not as positive as the aggregate numbers suggest. I think the Federal Reserve is aware of that.”
Other examples of a vulnerable job market include the steady run-up in unemployment over the past year, even though the latest rate remains at a historically low level, and longer stretches of joblessness, according to data on unemployment claims.
Through November, the US economy has added an average of 180,363 jobs per month, which is considerably cooler growth than what was seen during the post-pandemic rebound.
However, the current monthly average is right in line with what was seen during 2010 to 2019 — the longest period of job expansion on record.
And this current labor market is also becoming historic: With November’s gains, the US has added jobs for 47 consecutive months, making it the third-longest period of employment expansion on record.
The October jobs report was clearly “just a bump in the road to economic prosperity,” said Chris Rupkey, chief economist at FwdBonds.
“The economy is doing just fine, and the hopes for multiple Fed rate cuts next year are literally dying on the vine. The economy’s strength is just another sign that the Federal Reserve’s interest rates are not at restrictive levels that slow growth,” he wrote in commentary issued Friday.
“Washington does not need to be tinkering with measures to boost the economy as jobs are plentiful,” Rupkey wrote. “The inflation fire has not been put out, with core consumer price increases still elevated and another pop in wages or average hourly earnings in this month’s report.”
US futures rose slightly after the November jobs report was released Friday morning.
Futures on the Dow ticked up by around 50 points, or 0.1%. S&P 500 futures and Nasdaq 100 futures were higher by 0.1% and 0.2%, respectively.
The Labor Department revealed Friday that the US economy added 227,000 jobs last month, besting expectations for 200,000 and a massive bounce back after October’s 36,000 jobs added. The unemployment rate ticked up to 4.2% from 4.1%.
Traders are still expecting the Federal Reserve to cut its benchmark interest rate by a quarter point at its policy meeting later this month. There is currently a 91% certainty that a quarter-point cut will be announced on December 18, according to the CME FedWatch tool, an increase from the 72% certainty before the report.
A big question in the November jobs report was whether new revisions to October’s employment data would paint a more positive picture of the labor market.
The Department of Labor originally estimated employers hired just 12,000 workers that month, partly as a result of hurricanes and labor strikes. But many economists believed that as the agency received more subsequent data, it would show that hiring was actually much stronger than originally reported.
The new estimates indicate that’s true — but only very slightly: The DOL reported Friday that US employers hired 36,000 new workers in October, an upward revision of 24,000 jobs.
Still, for September, new revised estimates point to employers hiring 255,000 new workers versus the 223,000 previously estimated.
November’s biggest job creators were mostly the usual categories that have powered America’s labor market this year.
Employers in private education and health services added a robust 79,000 jobs in November, the most of any sector. Health care contributed 54,000 of those jobs, which included roles in ambulatory services, home health and nursing.
Leisure and hospitality was November’s second-biggest job creator, expanding headcount by a strong 53,000, mostly encompassing jobs in restaurants. It was also the industry’s biggest monthly gain since March. Government added 33,000 positions.
Manufacturing also saw a strong month of job growth in November, with its biggest monthly increase in a year. Employment in the industry has contracted in six of the past 11 months through November.
Retail trade lost the most jobs of any industry in November, shedding 28,000.
Job growth surged in November, an expected rebound after hurricanes and striking workers heavily distorted the October data.
The US economy added 227,000 jobs last month, as striking and weather-waylaid employees went back to work and bolstered a steady stream of employment gains, according to Bureau of Labor Statistics data released Friday.
October’s job gains, which tallied 12,000 in the first estimate, were revised higher to 36,000.
The unemployment rate ticked up to 4.2% for the third month in a row.
Economists were expecting a net gain of 200,000 jobs and for the unemployment rate to stay at 4.1%, according to FactSet.
