The Economy

U.S. Employers Add 178,000 Jobs in November

With the unemployment rate falling to 4.6%, the labor market continued its steady recovery from the recession though longer-term challenges remain.
Matthew HellerDecember 5, 2016
U.S. Employers Add 178,000 Jobs in November

U.S. employers maintained their steady pace of hiring in November while the unemployment rate dropped to its lowest level in more than nine years.

The Labor Department said non-farm payrolls increased by 178,000 jobs last month, up from a downwardly revised 142,000 in October. The gain was in line with economists’ estimates and right around the average for 2016.

The economy has added a monthly average of 180,000 net new jobs this year, down from an unusually strong 229,000 monthly average in 2015.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

The unemployment rate, meanwhile, fell 0.3% to 4.6%, the lowest since 2007. The Labor Department attributed the drop to a decline in the number of unemployed persons, which in November fell by 387,000 to 7.4 million.

Economists said the labor market is still dealing with some festering issues, for example, slow wage growth and a shrinking labor force, but the overall strength of the November report made it virtually certain that the Federal Reserve will raise interest rates next month.

“The Fed wants to hike in December, and this isn’t going to dissuade them at all. This essentially seals the deal,” Bill Stone, chief investment strategist at PNC Asset Management Group, told Forbes.

Average hourly earnings for all employees on private non-farm payrolls declined by 3 cents (0.1%) to $25.89 last month after an 11-cent (2.8%) increase in October, which was the strongest annual wage growth since June 2009.

Last month’s job gains were fueled by professional and business services (up 63,000 jobs, construction (up 19,000) and healthcare (up 28,000) but manufacturers shed 4,000 jobs in November after losing 5,000 the previous month.

The Wall Street Journal noted that the mix of job creation has been heavily weighted toward the service sector. During the Obama administration, a total of more than 300,000 manufacturing jobs has been lost.

“The labor market is in better shape than at any point in the recovery,” said Jed Kolko, chief economist at job site Indeed. “But we haven’t solved many of the longer-term challenges.”