US economy added a robust 263,000 jobs in November


Minneapolis
CNN Business

The U.S. economy added 263,000 jobs in November, defying the Federal Reserve’s efforts to tighten the economy and reduce inflation for years.

Unemployment rate it settled at 3.7%, according to the Labor Department, which released its latest jobs report Friday morning.

Economists polled by Refinitiv expect hiring trends to slow to just 200,000 jobs in November and the unemployment rate to remain at 3.7%.

Some of the biggest monthly job gains were in the leisure and hospitality sector, as well as health care. The hot jobs report also showed an unexpected rise in hourly earnings, another knock against the Fed’s efforts to curb inflation by cooling it. Central bank officials have said they are concerned about rising wages that inflation should rise.

In November, hourly wages rose by 0.6% from the previous month and by 5.1% on the year. Economists had been expecting interest rates to decline since October, when they increased by 0.5% month-on-month and 4.9% year-on-year.

“The November jobs report offers good holiday news for American workers, including a strong increase in wages,” Bankrate chief economist Mark Hamrick said in a statement. “Consistent with the traditional divide seen between Main Street and Wall Street, the report tells the Federal Reserve it has more work to do to fight inflation.”

Also Read :  H-E-B’s Plano store will open Nov. 2

The labor market picture is improving, reflecting several forces at play, said Sophia Koropeckyj, managing director of Moody’s Analytics.

“First, the tight labor market has limited vacation rentals, but employers are also hiring cautiously because of concerns about the strength of consumer spending,” he wrote in a note Friday. “Furthermore, employers may be more careful to support the balance between the cost of labor and goods. Other interest rate-sensitive industries are also lagging behind. It should be noted that going backwards does not mean getting rid of employees. It can mean being employed very carefully. This explains in part the decline in the number of people working and unemployment. ”

In recent weeks, there have been numerous layoff announcements from some of the biggest names in tech, with 52,771 layoffs announced. That’s the highest monthly figure for the sector since 2000, according to publishing company Challenger, Gray & Christmas.

Despite the high numbers, many of those losses appear to be resurfacing in the labor market, said Jim McCoy, vice president of solutions for ManpowerGroup.

“A lot of companies are digital right now,” he said in an interview. “And if not, they’re investing in automation, they’re investing in the internet, they’re investing in infrastructure, so they need [information technology] employees.”

Also Read :  The surging U.S. dollar is making it near impossible to afford anything in other countries

Friday’s report also had big revisions: September was revised up by 46,000 jobs to 269,000, and October was revised up by 23,000 to 284,000 jobs.

Taking into account these changes, the profit for the month of November – which remains above the monthly epidemic – is now the lowest jobs added since April 2021.

However, this may not bring comfort to the Fed, which has raised its interest rate by 3.75 percent this year in hopes of cooling demand and slowing inflation. While some areas of the economy are showing the results of the Fed’s actions – home sales have fallen and inflation rates have started to decrease – the labor market is still strong in its efforts to continue to recover the jobs lost during the pandemic and adjust to continue the strong consumer base. money, especially in services.

“While some economic data over the past few weeks have been supportive of the Fed moving forward on inflation, the strong performance data is the main source of concern for the Fed,” said Charlie Ripley, chief economist at Allianz Investment Management. speech on Thursday. “Wages need to fall at a slower rate to stimulate the economy and while inflation continues to grow, the impact on the labor market has been limited.”

Also Read :  GLOBAL ECONOMY Asia's factory activity weakens on global slowdown, cost pressures

The latest JOLTS report on job openings and layoffs shows there were more than 10 million job openings in October. Although this shows a gradual decline, it is still very high and higher than the approximately 4.5 million before Covid hit the US economy.

But since the participation rate is still at the lowest level before the pandemic, it will be difficult to fill all the available positions: The November employment report shows that the participation rate fell for the third straight month to 62.1%.

Friday’s jobs publication marks the final jobs report before the Fed’s next meeting on December 13-14, where officials are expected to raise rates by half a percent, slightly lower than the previous four meetings.

And the hot jobs report won’t move the Fed away from that with the aim of reducing its rise, said Angelo Kourkafas, an economist at Edward Jones.

“But what it does is it can undermine the prospect that the Fed will cut rates any time soon,” he told CNN Business. “We’re not there yet.”

Source

Leave a Reply

Your email address will not be published.