Unemployment in USA

USA - Unemployment

Non-farm payrolls soar to 10-month high in November

The U.S. labor market had another rock-solid performance in November. Non-farm payrolls increased by 266,000, overshooting market expectations of 180,000. November’s robust payroll growth paired with upward revisions to October’s figure (October: 156,000; previously reported: 128,000) suggests the economy maintained a respectable pace of expansion in the fourth quarter. The three-month average payroll gains clocked in at 205,000 in November, up notably from 189,000 in October, and handsomely above the roughly 100,000 jobs needed to absorb new entrants in the workforce.

Delving into the details, job growth was particularly strong in healthcare, education, and business and professional services. Manufacturing payrolls rebounded in November, more than reversing the losses registered in October related to the General Motors strike. Moreover, hiring activity in leisure and hospitality remained robust, while government payroll growth bounced back in the month.

The unemployment rate ticked back down to a near 50-year low of 3.5% in November from 3.6% in October, beating expectations of a steady readying, while the labor force participation rate edged down to 63.2% from 63.3%. Meanwhile, wage growth kept up a decent pace in November with hourly earnings rising 0.2% month-on-month in November, down from October’s 0.4% gains. Annual wage growth edged up to 3.1% in November from 3.0% in October, matching market expectations.

Commenting on the November jobs report, analysts at Nomura stated:

“The strength in the November payroll employment data is consistent with an economy that remains resilient to slowing external growth and trade tensions. […] Today’s report should assuage any concerns regarding the strength of the US labor market and will likely help keep the Fed comfortably on hold [at its 10–11 December meeting].”

FocusEconomics Consensus Forecast panelists expect the unemployment rate to average 3.7% in 2020, which is unchanged from last month’s estimate, and 3.9% in 2021.