In November, nonfarm payrolls saw a significant increase of 227,000 according to data from the Bureau of Labor Statistics. This is a sharp rise from the previous month’s report of only 12,000 and slightly higher than the expected consensus of 214,000. However, there was also a slight uptick in unemployment rate to 4.2% from October’s rate of 4.1%.
Additionally, average hourly earnings rose by +0.4%, surpassing both consensus expectations and October’s numbers which were also at +0.4%. Year-over-year earnings showed an increase as well at +4%, indicating that wage growth pressures are still present in the market.
However, there were some concerning factors within this report as well – such as a decrease in labor force participation rate to only62.% compared to an expected rate of62.% and last month’s figureof62%. The numberof unemployed workers increased by161,% whilethe labor force shrankby193,.%
Ona positive note,the SeptemberandOctober jobgrowthnumberswere revisedupwardby32,,00and24,,00respectively.This means that employment for those two months combined is actually56,,00higherthan previously reported.
The improvementinNovemberjobgrowthcanbe attributedtotheendofdisruptionsfromstormsandstrikeswhichhadpreviouslysuppressedjob growthinOctober.However,thisreportdidnot have much impact on themarketexpectationsfora potentialquarter-pointratecutbytheFederalReserve.AccordingtoCMEFedWatchTool,the probability forthisremainedhighat72.,%beforethereportbutdippedslightlyto70.,%afterwards.
RogerFerguson,aformerViceChairmanoftheFederalReserve,toldCNBCthatthefedwilllikelyproceedwitha25basispointratecutbutwillthenenterawait-and-see mode before making any further decisions based on economic data.
In summary, the November job growth numbers show a significant recovery from October’s storms and strikes. While there are still some concerns about wage growth and labor force participation, revisions to previous months’ data provide some positive news for the overall job market. The Federal Reserve is expected to make a quarter-point rate cut but will likely take a cautious approach moving forward.
