November nonfarm payrolls rise 228,000 vs. 200,000 est.

The U.S. economy created 228,000 jobs in November while the unemployment rate held steady at 4.1 percent, according to a Labor Department report Friday.

Economists surveyed by Reuters had expected nonfarm payrolls to grow by 200,000.

A more encompassing measure of joblessness that includes discouraged workers and those holding part-time positions for economic reasons moved up one-tenth to 8 percent. The ranks of those not in the labor force edged higher by 35,000 to 95.4 million.

Wall Street also was watching wage data closely. Average hourly earnings were estimated to rise 0.3 percent for the month or 2.7 percent for the year, and the final results disappointed in that regard.

Earnings rose 0.2 percent for the month and 2.5 percent for the year.

“The November employment data is largely as expected. For an expansion that began in mid-2009, no negative surprises are welcome,” said Mark Hamrick, senior economic analyst at Bankrate.com. “The lingering impacts of recent hurricanes and flooding have reverted back to relative calm in the statistics, meaning that this is a ‘cleaner’ number.”

Federal Reserve policymakers have been concerned over the lack of income growth, though they are still expected to raise the central bank’s benchmark interest rate a quarter point next week. The probability dipped a bit after the jobs release but remains above 90 percent, according to the CME.

“The jobs number in the report is good news for American workers, but the lack of stronger wage growth is not,” said Robert Frick, corporate economist with Navy Federal Credit Union. “Without stronger wage growth, higher inflation remains in doubt, and that takes away one reason for the Fed being more aggressive in hiking rates.”

The biggest job gains came in professional and business services [46,000], manufacturing [31,000] and health care [30,000]. In total, goods-producing occupations rose by 62,000. Construction saw a gain of 24,000, almost all of which were specialty trade contracts, a profession that has added 132,000 jobs over the past year.

Heading into the holiday season, retail jobs also grew by 18,7000.

Markets reacted positively to the news, with major stock indexes likely to open higher and government bond yields up a notch.

Job growth has slowed this year — to 174,000 per month compared to 187,000 a year ago — as the economy edges closer to what officials consider full employment, or the condition where those looking for work have positions. However, Fed officials have been dismayed that the tight labor market has not resulted in significantly higher wages.

“With continued improvement in the labor market, room for continued upward trajectory in 2018 is likely limited because there’s not much slack left to hire workers for further growth,” said Steve Rick, chief economist at CUNA Mutual Group.

The quality of job creation tilted toward full time, whose ranks grew by 160,000, while part-time positions contracted by 125,000, according to the household survey.

This entry was posted in US Economy. Bookmark the permalink.

Leave a Reply