In November, the U.S. economy added 263,000 jobs, more than the 200,000 jobs that economists had predicted. At the same time, wages have gone up by the most since January, which suggests that the Federal Reserve’s plan to slow growth by raising interest rates still has a ways to go. In its latest report on Friday, the Bureau of Labor Statistics (BLS) said that the unemployment rate stayed at 3.7%.
Gains in Jobs by Sector
After the jobs report was better than expected, stocks went down, and bond yields went up. The most jobs were added in the leisure and hospitality sector, which added 88,000 jobs. Food services and drinking places added 62,000 jobs, which was the most of any sector. Still, the total number of jobs was 980,000, or 5.8%, below its peak before the pandemic.
Forty-five thousand more people got jobs in health care, most of them in hospitals, nursing homes, and ambulatory care services. There were 42,000 more jobs in the government and 32,000 in the local government. Other sectors that saw growth were social assistance (+23,000), construction (+20,000), information (+19,000), manufacturing (+14,000), financial activities (+14,000), and professional and business services (+6,000).
On the other hand, retail trade lost 30,000 jobs, 32,000 of which were at general merchandise stores. An increase of 10,000 jobs at places that sell parts for cars made up for the losses. Transportation and storage jobs went away by 15,000.
The Unemployment Rate Stays the Same.
In November, the U.S. unemployment rate stayed at 3.7%, less than expected, a slight rise to 3.8%. The number of people without jobs stayed almost the same at 6 million. The employment-to-population ratio was 59.9%, and the number of people working in the labour force was 62.1%. In October, it was 62.2%. Both measures are still 1.3 percentage points below where they were before the pandemic. This is probably because jobs were lost permanently during the pandemic.
In November, the average hourly wage for private-sector workers went up 0.6% to $32.82. This was faster than the 0.5% increase in October and the highest monthly wage growth since January. From the same time in 2021 to the same time in 2022, nominal wages went up by 5.1% each year. Still, the gains haven’t kept up with inflation, which is growing at 7.7% per year. This means that consumers have even less money to spend.
What this means for Fed policy
Strength in the job market could force the Fed to take a more aggressive approach to monetary policy, especially since inflation is still well above the target range of 2% set by the central bank.