US economy smashes forecasts, adds 266,000 jobs in November
Dec. 6, 2019, 08:42 AM
Carl Court/Getty Images
- The US Bureau of Labor Statistics said 266,000 nonfarm payrolls were created last month, pushing the unemployment rate to a historically low 3.5%.
- Economists had predicted a rise in payroll gains to 185,000 in November from 156,000 a month earlier.
- Friday’s report came amid concerns that one of the brightest spots in the economy had started to run out of steam.
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Government data out Friday showed the US added far more jobs than expected in November, relieving concerns that one of the brightest spots in the economy was starting to run out of steam.
The Bureau of Labor Statistics said 266,000 nonfarm payrolls were created last month, pushing the unemployment rate to a historically low 3.5%. The figure was temporarily boosted by the end of a six-week strike at General Motors, which had idled roughly 50,000 workers throughout October.
Economists had predicted that would help lift payroll gains to 185,000 in November from 156,000 a month earlier.
“Looking at the high number of jobs that were added in November, you might forget that the story for most of this year was that the economy was slowing down,” said Nick Bunker, the research director at Indeed Hiring Lab. “The slowdown did happen, but we can move into 2020 with a bit more optimism.”
Wage growth continued to outpace inflation last month but remained stubbornly below what would be expected with an unemployment rate at its lowest level in half a century. Average hourly earnings rose 3.1% year-over-year in November, a slight uptick from a month earlier but short of the peak growth levels seen in early 2019.
November marked the 110th consecutive month of job gains, but the record-long expansion has moderated this year as the effects of tax cuts began to fade and a global slowdown hit. The US has added an average of 180,000 jobs a month this year, compared with an average monthly gain of 223,000 in 2018.
Hiring has held up despite recent escalations in a tit-for-tat trade dispute between the US and China. That could offer the Trump administration more room to negotiate the structural issues it vowed to address in the yearlong impasse, such as intellectual-property theft and technology transfers.
“This report has important political implications as we move into an election year — the report today alleviates pressure on the Trump administration to make a trade deal with China, giving negotiators more leverage to push for a harder line,” said Daniel Zhao, a senior economist at the career site Glassdoor.
Friday’s report was likely to bolster expectations for the Federal Reserve to maintain a wait-and-see approach at a policy meeting next week. After lowering interest rates three times this year, the central bank has signaled it saw little to no immediate need for additional stimulus measures.
“A repeat of this performance in December would be a different story, but we think downside correction is more likely,” said Ian Shepherdson, the chief economist at Pantheon Macroeconomics. “Still, today’s print clearly makes a January Fed easing much less likely.”
The labor market was slower to pull Americans from the sidelines in November. The labor-force participation rate edged down to 63.2%, a figure that is low by historical standards and compared with other countries’.