Employers added 227,000 workers to their payrolls in November, but 7.1 million Americans remain unemployed, pushing the unemployment rate back to 4.2%.
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Job growth rebounded in November after October’s disruption from strikes and hurricanes, but it was not enough to stem the rise in the unemployment rate, strengthening the case for a Dec. 18 Fed rate cut and further easing next year. Ta.
Employers added 227,000 workers in November, revising previous estimates to show that 56,000 more jobs were created in September and October than previously expected. The Bureau of Statistics reported on Friday.
However, the number of unemployed Americans is 7.1 million, an increase of 14% from the previous year, and the US unemployment rate has risen to 4.2%.
Mike Fratantoni, chief economist at the Mortgage Bankers Association, said in a statement that while employment growth has rebounded significantly since October, “the report shows further softening in the labor market as a whole. ” he said.
Mike Fratantoni
“Fed officials have cited a ‘data reliance’ on decisions about future rate cuts,” Fratantoni said. “These data support a rate cut at the December meeting, and the MBA expects the Fed to continue lowering short-term rates in 2025, although the pace of rate cuts is likely to slow.”
Futures markets tracked by the CME FedWatch tool on Friday showed an 89% chance the Fed would cut interest rates by 25 basis points in December, up from 66% on Nov. 29. One basis point is one hundredth of a percentage point.
The yield on the 10-year U.S. Treasury, a barometer of mortgage rates, initially fell 5 basis points after Friday’s jobs report, but rose toward Thursday’s close of 4.18%.
Employment growth slows down
Employers added just 12,000 jobs in October, an initial forecast that was revised upwards to 36,000 in Friday’s jobs report, with expectations for September payroll growth also at 32,000. Person has been revised upward.
While employment increased in health care, leisure and hospitality, and government and social assistance sectors from October to November, retail jobs were cut by 28,000.
samuel’s tomb
However, Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, said in a note to clients that the overall trend is that job growth is slowing, averaging 132,000 jobs per month from September to November. He said that
That’s down from the average of 191,000 new jobs per month in the first three quarters of 2024 and “likely to be below” the break-even point of about 175,000 jobs, Tombs said.
“After October’s hurricanes and strikes, the gradual recovery in employment numbers in November suggests that underlying trends continue to worsen and confirms the government’s support.” [Fed] “We plan to lower fund rates again later this month,” Toombs said.
Pantheon Macroeconomics predicts that monthly employment growth next year will average around 100,000 people. [Fed] Cut fund interest rates by 25 basis points at the replacement meeting despite the risk of inflation from tariffs. ”
Unemployment rate is on the rise
The number of job openings fell by 941,000 in October from the same month a year ago, according to Wednesday’s Job Openings and Turnover Summary (JOLTS) report.
“While we are not seeing an increase in layoffs, new entrants and individuals who have lost their jobs are finding it more difficult to regain employment,” Fratantoni said.
This helps explain why the unemployment rate rose from 6.98 million in October to 7.14 million in November, returning the unemployment rate to its second-highest level this year.
The unemployment rate hit a 2024 peak of 4.3% in July, then retreated to 4.1% in September.
Almost one in four (23.2%) unemployed people have been out of work for more than 27 weeks. The number of long-term unemployed people was 1.7 million, an increase of 500,000 from a year ago.
Toombs said that while the 161,000 increase in the number of unemployed people from October to November was too small to be statistically significant, the 496,000 increase in the past six months was “significant. “This increase is supported by ongoing claims data and consumer confidence surveys.”
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