Relevant Science

Employers added 227,000 jobs in November.

Job creation bounced back in November after disruptions from storms and a major strike, reinforcing an employment picture of modest expansion over the past few months.

The economy added 227,000 jobs last month, seasonally adjusted, the Labor Department reported on Friday. Revisions to the prior two months added 56,000 jobs.

The unemployment rate ticked up to 4.2 percent, from 4.1 percent in October.

Wages come in hot: Average hourly earnings rose a higher-than-expected 0.4 percent over the month, which is surprising in part because so many of the jobs added were in hurricane-impacted sectors that have lower-than-average pay.
Labor force participation steady: The share of people between the ages of 25 and 54 who were working or looking for work in November remained at 83.5 percent, which is down from a cycle high of 84 percent over the summer.
Retail looks weak: After adding essentially no jobs over the past year, the retail sector shed 28,000 positions, probably reflecting lower-than-normal hiring for the busy holiday season.
Lost jobs restored: About 37,000 workers — most of them at Boeing — ended strikes after the October survey, adding a tailwind to the latest report. It’s less clear how many jobs were affected in October by Hurricanes Helene and Milton, but most forecasters estimated that 50,000 to 70,000 would come back last month. That increase was reflected in the 53,000 jobs added in leisure and hospitality, a sector that had increased by 21,000 positions on average over the previous 12 months.

Overall, this report suggests the job market is still in solid shape. But there are some signs of weakness here, as well. It’s taking people longer to find jobs, and the number of people considered long-term unemployed (those out of work more than six months) has been rising.

The average work week has recovered a bit, to 34.3 hours, but remains at a fairly low ebb as companies have tried to hold on to workers even as business has weakened.

As interest rates have started dropping, the finance and insurance sector has started recovering, after shedding thousands of mortgage brokers and other staff. The industry added 13,200 jobs last month.

It’s possible that the low retail number — a subtraction of 28,000 jobs, seasonally adjusted — may reflect movement toward online sales at the start of the holiday season. Employment related to e-commerce often shows up in the transportation and warehousing category, which has been recovering after a post-pandemic dip.

A sign of how the hurricanes skewed the past two months’ data: In October, more than half a million Americans reported being absent from work because of bad weather. In November, just 62,000 people said the same.

Danielle Kaye

Stock futures rose slightly after the better-than-expected job numbers, with futures on the S&P 500 up about 0.1 percent. But the reaction is muted, as there’s no major surprise for investors in this report. The bond market is also fairly flat.

The unemployment rate edged up only a tenth of a point, but the reasons were not encouraging. The number of unemployed workers rose by 161,000, while the labor force shrank by 193,000.

Policymakers may take note of the steady progress in average hourly earnings, which have grown by 4 percent over the past year. That’s enough to lift paychecks and to suggest that the job market retains some momentum, but not so much to make officials worry that it will fuel a big future pop in inflation.

Fed officials are likely to look past the hiring numbers, since they’ve been muddled by storms and strikes.

Job growth in November was helped by the end of disruptions from storms and strikes, which suppressed job growth in October. If you just average the two numbers, you get a job gain of 131,500 jobs, consistent with a slowing but not collapsing job market.

That very slight tick up in the unemployment rate probably reinforces the Fed’s ongoing process of lowering rates, at least at the margin. But it is not a big enough move to upend how the central bank is viewing the labor market and the economy. Conditions are cooling, but not crumbling.

The numbers are out! U.S. employers added 227,000 jobs in November, and the unemployment rate ticked up to 4.2 percent.

The very weak October job gain was revised up to 36,000 from 12,000. That number was suppressed by the effect of storms and strikes. September’s gain was also revised up.

Danielle Kaye

Investors are pricing in a roughly 68 percent chance of another quarter-point interest rate cut from the Federal Reserve at its meeting later this month, according to CME FedWatch, down from almost 80 percent odds earlier this week. If the jobs numbers come in hotter than expected, investors might recalibrate their bets even more.

Joe Rennison

Stocks and bonds are treading water ahead of the jobs data. Economists are predicting a return to a more typical month of around 200,000 jobs added. The bond market appears less sure, potentially setting the market up for a sharp move once the numbers are released.

Danielle Kaye

For those in need of a job, landing one might still be a challenge.

Image

The unemployment rate was 4.1 percent in October, low by historical standards, but there are signs that it can be difficult to land a job.Credit...Philip Cheung for The New York Times

The unemployment rate, which ticked up slightly to 4.2 percent in November, remains low by historical standards. But under the surface, there are signs that it can be difficult to land a job.

The share of unemployed workers finding jobs has been falling, and the average duration of unemployment has been rising — two indications of mounting strain for job seekers.

The Bureau of Labor Statistics reported a steep drop in the job-finding rate in October, extending previous months’ declines. That points to a potentially challenging dynamic: Layoffs remain relatively low, but people who lose their jobs could be struggling to find new ones.

The average number of weeks of unemployment also reached its highest level in years in November, at 23.7 weeks, up from another recent high of 22.9 weeks in October. In the past few months, more people have been falling into the category of long-term unemployment, typically defined as being out of work for more than six months.

A recent downturn in open roles could have been contributing to the strain on job seekers, keeping many unemployed for longer. Available positions in September tumbled to 7.4 million, resembling prepandemic levels.

Job openings did tick up in October, surpassing expectations, according to data from the Bureau of Labor Statistics released this week. And in a survey conducted last month by the Conference Board, roughly 15 percent of consumers said jobs were hard to get, down from the almost 18 percent who said the same in October, hinting at easing conditions.

Fed officials are likely to closely watch the unemployment rate.

Image

Friday’s employment report could be important to Federal Reserve officials as they decide whether to cut interest rates in December and how much to lower them next year.Credit...Anna Rose Layden for The New York Times

Federal Reserve officials are trying to decide whether to cut interest rates in December and how much to lower them next year. Friday’s employment report could be an important factor as they weigh both decisions.

This is the final snapshot of the United States labor market that central bankers will glimpse before their Dec. 17-18 meeting, the Fed’s last policy meeting of 2024. It will shape how officials understand the economy as they release both a rate decision and a fresh set of forecasts predicting how much they will cut borrowing costs in 2025.

Fed officials are unlikely to hang their entire decision on this one job market report: Hiring data have been muddled by strikes and hurricanes, which is likely to make the numbers tough to read. And officials are also focused on what is happening with inflation. A fresh Consumer Price Index report is set for release on Dec. 11.

But Friday’s figures do matter, in part because this is the last major data point officials will receive before they enter their pre-meeting blackout period, during which officials do not speak in public about their outlook for interest rates.

If joblessness holds steady, for instance, that would be encouraging news for central bankers and a sign that they do not need to rush to slash borrowing costs. If it picks up, that could argue for faster rate cuts. And if the job market seems to be accelerating at a time when the broader economy is also strong, that could argue for a slower pace of rate cuts going forward.

“The unemployment rate might matter — that's less directly impacted by hurricanes and strikes,” said Julia Coronado, founder of MacroPolicy Perspectives.

The Fed raised its policy rate to about 5.3 percent in 2022 and 2023 and then held it there for more than a year in a bid to slow the economy and bring rapid price increases under control. But inflation has come down meaningfully, so officials began to lower the rate in September. They cut it for a second time in November, to a range of 4.5 to 4.75 percent.

The economy, though, has been more resilient than policymakers had expected and inflation has proved slightly sticky in recent months, which has called into question how much and how quickly rates will fall.

Ms. Coronado said she thinks that the Fed is likely to cut rates at its meeting this month, but that it will simultaneously dial back its forecast for reductions in 2025. Officials had predicted four rate cuts in 2025 back in September, but she said that they could drop that to three, or even two.

Of course, if a strong economy were to deter Fed officials from cutting interest rates as much as they otherwise would have next year, that could put the central bank on a crash course with the incoming administration.

Donald J. Trump, the president-elect, has a track record of pushing for lower interest rates — and blasting the Fed on social media and in public when it fails to deliver them.

But the Fed is independent of politics, and its officials regularly say that they set rates solely based on what they see and expect to see in the economy.

Jerome H. Powell, the Fed chair, said during an interview at The New York Times’s DealBook Summit this week that “we’re in a very good place with the economy,” noting that growth had been stronger and the unemployment rate was still at a “very, very low level.”

Compared with when the Fed began to cut rates in September, “the labor market is better, and the downside risks appear to be less, in the labor market,” Mr. Powell said, explaining that the Fed could be more “cautious” with its moves.

See more on: Federal Reserve (The Fed)