The US workforce added 199,000 jobs last month, a robust reading as the world’s largest economy continues to grapple with higher interest rates.
Employment growth has been fading this year after the Federal Reserve launched an aggressive campaign to pull back inflation from its highest levels in a generation. Official data has bolstered hopes that the central bank will manage to guide the US economy to a so-called “soft landing”, where price growth normalises and recession is avoided.
Economists had expected non-farm payrolls to increase by about 180,000 jobs in November, up from a reading of 150,000 in October. Friday’s report still amounts to a deceleration from earlier in the year, and is short of the average reading for 2023.
The headline unemployment rate stood at 3.7%, according to data released by the Bureau of Labor Statistics, down from 3.9% the previous month.
It comes as policymakers plot the next steps of their campaign, with inflation slipping back towards the Fed’s 2% target. Some investors have expressed hope that the central bank will start cutting rates as soon as next year.
Jerome Powell, chairman of the Fed, stressed last month that it was “committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation sustainably down to 2% over time, and to keeping policy restrictive until we are confident that inflation is on a path to that objective”.
Nancy Vanden Houten, lead economist at Oxford Economics, said November’s jobs data was boosted by the end of two large strikes, the United Auto Workers six-week strike and the months-long actions by US writers and actors.
“Payroll gains were inflated by returning strikers in November, but the underlying pace of job growth has slowed in recent months,” she said. “That’s encouraging for the Fed, which has likely ruled out further rate increases. However, the details in the rest of the report were robust enough in our view to keep rate cuts off the table for several more months.”
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: “The trend in the unemployment rate is still upwards, consistent with people’s reported nervousness about the labor market, and we have to expect a rebound to new highs over the next few months.”