The U.S. economy added 199,000 jobs in November and the unemployment rate fell to 3.7%, signaling that businesses are still hiring despite signs of a slowing economy.
November’s job growth exceeded forecasts from economists, who had expected businesses to add about 175,000 new jobs, according to financial data firm FactSet. Employment growth is slowing from the average monthly gain of 240,000 over the last 12 months.
“This was a much better than expected payroll report, more so because it puts to bed fears about a deteriorating labor market amid a rising unemployment rate over the last several months,” Sonu Varghese, global macro strategist at Carson Group, said in an email.
The monthly jobs report is watched closely by the Federal Reserve, which has been raising interest rates since early 2022 in an effort to put the brakes on the economy and cool inflation. Most strategists are now forecasting that the central bank will hold rates steady at its next meeting, scheduled for December 13.
The end of strikes by autoworkers and Hollywood actors increased payrolls by 47,000 according to the Bureau of Labor Statistics. Still, the underlying pace of payroll additions has been slowing. Stripping out that one-time boost, the 152,000 gain was roughly in line with the muted increase in October, noted Paul Ashworth, chief North American economist at Capital Economics.
Those gains including 49,000 government jobs and another 77,000 in health care. If those non-cyclical sectors were taken out of the equation, the economy added just 26,000 jobs, adding to evidence that “after a very strong third quarter, growth is slowing to a crawl in the fourth quarter,” Ashworth wrote in a note to clients.
Average hourly earnings rose 0.4% last month to $34.10, an increase of 4% over the last 12 months, the Labor Department reported. The measure is considered key as workers look to stay ahead of inflation.
Stock-market futures trimmed their declines in the wake of the report, with the three major indexes all slightly lower.
