Just the Facts

Five Facts on the November Jobs Report

By Emma Petasis
December 7, 2018 | Blog

On Friday the Labor Department released its monthly hiring and unemployment figures for November.  Here are five facts on the November Jobs Report:

The United States added 155,000 jobs in November, falling short of economists’ forecasts of 190,000 new jobs

While job numbers fell short of expectations economists are reminding people that the overall employment market remains strong. Overall, monthly job gains are still averaging above 200,000 this year, and the report marks the 98th consecutive month in which the economy added jobs. As David Donabedian, chief investment officer of CIBC Private Wealth Management, stated “It’s obviously an economy that is well into expansion mode but that is coming off the boil after a strong second and third quarter… the state of the job market is good. It’s just that the pace of job creation is slowing a little bit.”

The unemployment rate held steady at 3.7% in November, keeping it at its lowest level since 1969

In September, the unemployment rate in the U.S. dropped to 3.7%, its lowest since December of 1969, when unemployment was at 3.5%. With job gains in both October and November, this number has stayed steady. The unemployment rate has dropped more than six percentage points from a high of 10% unemployment in October 2009 when the U.S. was in the midst of the Great Recession.

Average hourly earnings rose .2% in November, matching October’s 3.1% year-to-year growth, the best yearly earnings increase since 2009

The .2% increase brings the average hourly earnings for all private-sector workers to $27.35. In addition, the 3.1% increase is the second time since the Great Recession, with October being the first, that average annualized hourly wages have eclipsed the 3% mark.  This increase in earnings is consistent with the historically tight labor market. As eligible workers become scarcer, companies are forced to compete for employees, which often means higher wages and better benefits.

The report shows that the economy has largely been able to withstand the political turmoil and trade disputes that have been an area of concern

Over the past several months economists and politicians alike have expressed concern over growing trade disputes between the U.S. and several of its key trading partners, including Canada, Mexico, the European Union, and China. While the U.S., Canada, and Mexico were able to reach an agreement on a new version of the North American Free Trade Agreement, dubbed the U.S.-Mexico Trade Agreement or USMCA , many questions remain as to whether the U.S. and China, the world’s two largest economies, will be able to reconcile their differences.  However, despite these concerns, the economy has continued to grow at an impressive rate, with Federal Reserve Chairman Jerome Powell recently stating that the U.S. economy’s outlook was “remarkably positive,” and that the country was on the cusp of a “historically rare” era of low-unemployment and low-inflation.

The November jobs report could encourage the Federal Reserve to pull back on interest rate hikes

Central banks use rate hikes to deliberately curb growth in an effort to keep economies stable, prolong growth rates, and limit inflation and periods of economic decline. With better than average jobs numbers and all-time highs in the stock market Federal Reserve Chairman Jerome Powell has already raised rates three times in 2018, most recently raising the benchmark federal funds rate to a range of 2-2.25% on September 26. However, with the more pedestrian November jobs numbers and recent drops in the stock market, the Fed could, according to The Wall Street Journal, “consider veering from its predictable path of quarterly rises to a more data-dependent approach that could slow down hikes in 2019 and beyond.”

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