In the United States, a recovery in job creation was recorded in November after the minimum figures in the previous month.
The mentioned information was made public on Friday, December 6, by the US Bureau of Labor Statistics. The November recovery is the result of a weakening of the impact of factors such as a large-scale labor strike and the effects of severe storms in the southeastern United States.
Last month, the US nonfarm payrolls increased by 227,000. In October, the corresponding upwardly revised figure was 36,000. It is worth noting that the Dow Jones consensus estimate predicted that nonfarm payrolls would increase by 214,000 in the United States in November.
Moreover, September’s payroll count also was revised upward. The corresponding figure was fixed at 255,000, which is 32,000 higher than the previous estimate. In October, the mentioned number was held back by factors such as the effects of Hurricane Milton and the Boeing strike.
The unemployment rate in the United States showed an increase in November. The corresponding figure was fixed at 4.2%. It is worth noting that the November result coincided with the preliminary expectations of experts. In October, the mentioned figure in the United States was recorded at 4.1%.
The number of unemployed in the US increased in November due to a drop in the labor force participation rate.
The broader indicator, which takes into account discouraged workers and those holding part-time jobs for economic reasons, showed a slight increase last month, reaching 7.8%.
The data published on Friday will likely become a significant argument in favor of cutting interest rates by the Federal Reserve in the current month.
Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, said the United States economic system continues to produce a healthy amount of job and income gains. At the same time, in this context, it was separately noted that a further increase in the unemployment rate tempers some of the shine in the labor market and gives the Fed what it needs to cut rates in December.
In November, job gains in the United States were focused on health care (54,000), leisure and hospitality (53,000), and government (33,000). It is worth noting that over the past few years, the mentioned sectors have consistently led to payroll growth.
Social assistance added 19,000 to the total last month in the United States.
At the same time, in the US, hiring in the retail trade sector showed a decrease of 28,000 ahead of the holiday season. This year, Thanksgiving is coming later than usual. It is possible that the relevant circumstance caused some stores to have held off hiring.
Worker pay in the United States continues to demonstrate the dynamic of growth. In November, average hourly earnings increased by 0.4% compared to the indicator recorded in October. Also, this figure grew by 4% year-on-year last month. It is worth noting that the mentioned result minimally exceeded the preliminary expectations of experts.
Stock market futures showed growth after data on the dynamic of the situation in the United States labor market were published. At the same time, Treasury yields declined.
Also after the payroll data was published, traders accelerated their bets on lowering the cost of borrowing. Market-implied odds of cutting interest rates by a quarter of a percentage point exceeded 88%. The United States central bank’s policymakers will make the next decision regarding the cost of borrowing on December 18.
Lindsay Rosner, head of multi-service investing at Goldman Sachs Asset Management, said that the data released on Friday was a Thanksgiving buffet with payrolls spot on, revisions positive, but unemployment ticking higher despite the participation rate falling. It was also noted that this print doesn’t kill the holiday spirit and the Fed remains on track to deliver a cut in December.
This week, Fed chairman Jerome Powell said that the strong situation in the space of the United States economic system allows him and his colleagues to be patient when making interest rate decisions. Other officials characterize as a realistic probability of further lowering the cost of borrowing but taking into account changes in economic data.
The central bank of the United States has made significant progress in combating inflation. In October, the corresponding figure was 2.6%. In June 2022, inflation in the United States was fixed at 9.1%. At the same time, in recent months, the tendency of renewed price growth has been observed in the US. The October jobs report and some other reports indicate that the United States labor market continues to show an upward dynamic, but the pace of the corresponding process is slowing down.
The survey of households, which is used to calculate the unemployment rate, witnessed the same result as the establishment survey. This data provides information about the headline payroll count.
Household employment in November in the United States increased by 174,000. The corresponding result was recorded, even though the labor force contracted by 193,000.
The labor force participation rate, which measures the share of the working-age population either at work or looking for a job, was fixed at 62.5% in the United States last month.
Full-time job holders in November in the US declined by 111,000. At the same time, part-time workers were off by 268,000.
Elyse Ausenbaugh, head of investment strategy at JPMorgan Wealth Management, stated strong pay gains appear to be a holdout while other Covid-era distortions fade.
