The U.S. economy added 227,000 nonfarm workers in November, beating expectations of 214,000 and recovering from the 36,000 jobs hit by October’s hurricane. The Bureau of Labor Statistics (BLS) reported stronger-than-expected data on Friday, along with an increase in the unemployment rate to 4.2%, as expected.
Nonfarm Payrolls
The BLS publishes 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 pattern can provide a distorted view of broader economic trends).
This month, the 227,000 job addition marks a significant rebound from October’s 36,000, but remains below September’s 255,000.
By sector:
- Healthcare: +54,000 jobs
- Leisure and hospitality: +53,000 jobs
- Government: +33,000 jobs
- Social assistance: +19,000 jobs
However, retail lost 28,000 jobs ahead of the holiday season.
Average hourly wages increased 0.4% month-over-month and 4% year-over-year, slightly exceeding forecasts.
However, despite the increase in jobs, the unemployment rate rose to 4.2%. This means that the number of people looking for work has increased faster than the number of jobs created.
Implications
November’s gains reflect the easing of disruption caused by October’s Hurricane Milton (which hit Florida on October 10) and the Boeing strike (September 13 to November 4). Transportation manufacturing employment rose as striking Boeing workers returned to work.
Market analysts see the data as a green light for the Federal Reserve to implement another interest rate cut at its December 18 meeting. Market-implied odds for a 25 basis point reduction rose above 88% following the report. The Fed already cut 50 basis points in September and 25 in November.
Ellen Zentner, chief economic strategist at Morgan Stanley, said: “The economy continues to produce a good amount of jobs and income gains, but a further rise in the unemployment rate dulls some of the brightness in the labor market and gives to the Fed the one who needs to cut rates in December.”
Reaction
Stock futures rose, reflecting investor optimism.
Treasury yields fell, in line with the increased likelihood of a rate cut.
The US dollar weakened slightly as markets priced in further easing.