Jobs Report: Unemployment at 9-Year Low; Economy Added 178,000 Jobs in November
The total jobs tally was about what economists predicted for this month’s Employment Situation Summary. The jobs report from the Labor Department was in line with monthly averages for the year. Public and private, non-farm payrolls added 178,000 jobs, while economists polled by Bloomberg predicted the addition of 180,000 jobs. Unemployment dropped 0.3 percentage points to 4.6 percent, a nine-year low.
After this solid jobs report, many expect the Fed to raise interest rates at their meeting later in December.
“This was the last hurdle on the path to a December hike, and it has been cleared convincingly,” said Luke Bartholomew, an investment manager at Aberdeen Asset Management, as reported by Business Insider. “It is now incredibly hard to imagine what would stop the Fed from going. The debate now is all about what rates will do next year and beyond.”
Where the Jobs Are
The following industries added jobs last month: professional and business services (+63,000 jobs), healthcare (+28,000 jobs), and construction (+19,000 jobs).
Other industries were largely unchanged for the month, including manufacturing, mining, retail trade, wholesale trade, transportation and warehousing, government, information, financial activities, and leisure and hospitality.
Average Gains for the Year
Incorporating revisions that lowered September and October’s tallies by 2,000 jobs total, job gains have averaged 176,000 over the past three months and 180,000 for the year so far. By comparison, job gains in 2015 averaged 229,000 per month.
But lower gains might not be a bad sign.
“Forecasters have long suggested that as the economy approaches full employment, jobs growth must slow,” wrote Justin Wolfers at The New York Times, after May’s disappointing jobs report. “By this reckoning, the economy cannot continue to create jobs more rapidly than the labor force is growing without the emergence of bottlenecks. If this is right, perhaps we should get used to seeing employment growth closer to 100,000 per month.”
The question is, will reaching full employment bring the wage growth workers want?
Wages Declined in November
After making gains in previous months, wages dropped slightly. Average hourly earnings for private-sector employees declined 3 cents to $25.89.
“What is probably most surprising about those weak wage trends is that the unemployment rate would seem to imply that wages should be rising at a far stronger pace,” writes Paul Vigna at The Wall Street Journal.
“Everybody keeps saying that the tighter labor market should lead to rising wages. And they’re right, but it isn’t happening. … The economy is, therefore, still a very long way away from producing the kinds of wage trends that would signal a truly healthy market.”
The PayScale Index, which measures the change in wages for employed U.S. workers, forecasts 1 percent year-over-year wage growth for the fourth quarter of the year.
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