Job creation in November picked up from last month’s slowdown as the effects of a significant labor strike and violent storms in the Southeast eased, the Bureau of Labor Statistics reported Friday.
Non-farm payrolls rose by 227,000 in the month, compared to the 36,000 revised high in October and the Dow Jones consensus estimate of 214,000.
The unemployment rate, however, rose to 4.2%, as expected. The unemployment rate increases as the labor force participation rate decreases and the labor force itself decreases. A broad measure that includes discouraged workers and those taking part-time jobs for economic reasons rose to 7.8%.
Job gains were concentrated in health care (54,000), leisure and hospitality (53,000) and government (33,000), sectors that have led wage growth over the past few years.
At the same time, retail sales saw a 28,000 drop heading into the holiday season. With Thanksgiving coming later than usual this year, some stores may have stopped hiring.
Labor wages continued to rise, with hourly earnings up 0.4% from last month and 4% over 12 months. Both numbers were 0.1 percentage point above expectations.
Stock market futures edged higher after the report while Treasury yields were lower.
The report comes with questions about the state of the labor market and how that will affect the Federal Reserve’s decisions on interest rates.
Traders have quickened their bets on a rate cut following the payday release, with market-quoted odds rising more than 88% to cut points in the quarter. when central bank policymakers make their next decision on December 18.
Earlier this week, Fed Chairman Jerome Powell said that the strong economic environment gives him and his colleagues the ability to be patient when making interest rate decisions. Other officials have said they see a rate cut as a possibility but it depends on changing economic data.
Although inflation has finished boiling over from a 40-year high in mid-2022, recent months have shown prices rising. At the same time, the October jobs report and various other reports revealed a labor market that was growing but at a slower pace.
The household survey, which is used to calculate the unemployment rate, paints a similar picture to the establishment survey that provides earnings figures.
According to the BLS, household employment increased by 174,000 in the month as workers gained contracts by 193,000. The labor force participation rate, which measures the proportion of the working-age population either in work or looking for work, fell to 62.5%, down 0.1 percentage points.
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