The US Added 199k Jobs in November, Higher than Expected

The Labor Department released the latest non-farm payrolls (NFP) data on Friday, showcasing a seasonally adjusted increase of 199,000 in November. That figure was above consensus expectations of 180,000, underscoring the ongoing challenges in restricting the US economy’s growth despite recent indications of its softening.

Unemployment Rate Fell to 3.7% in November

Nonfarm payrolls climbed by a seasonally adjusted 199,000 in November, ahead of the Dow Jones estimate of 180,000 and the unrevised October gain of 150,000.

Meanwhile, the unemployment rate eased to 3.7% for the month, compared with the consensus estimate of 3.9%, the Labor Department reported on Friday. The drop in the unemployment rate came as the labor force participation rate rose to 62.8%. A broader unemployment gauge that takes discouraged workers and those holding part-time positions declined to 7%, representing a 0.2 percentage point decrease. 

Annual wage inflation, measured by the change in Average Hourly Earnings, stood at 4%, in line with forecasts. Month-on-month, the wage inflation edged 0.4% higher, slightly above the 0.3% estimate. 

The household survey for determining the unemployment rate revealed a significantly more robust job growth of 747,000, accompanied by an increase of 532,000 workers in the labor force.

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Stocks Slip, Yields Rise on NFP Data

Markets displayed a mixed reaction to the latest NFP report.

Notably, stock market futures opened lower on Friday, with the S&P 500 slipping to 4,580 from recent highs, while Dow Jones remained almost flat at 36,098. Simultaneously, US Treasuries were in the green at the time of writing, with the 10-year and 20-year yields rising 4.218% and 4.485, respectively.

The new payroll data comes amidst a vital period for the US economy, whose growth has defied expectations for a recession this year. However, most economists and analysts still expect a steep slowdown in the fourth quarter and muted gains in 2024. 

The Federal Reserve closely monitors the jobs data, providing them with crucial insights needed for policymakers to bring down inflation, which has eased from 4-decade highs in 2022. Futures market pricing strongly suggests that the Fed reached the end of its rate-hiking campaign and points to the first interest rate cuts beginning next year, though the bank’s officials have been more cautious in their comments about the next moves. 

Do you agree with some economists that the US will avoid a recession that many have forecasted in 2024? Let us know in the comments below.