The Economy

U.S. Job Growth Shatters November Forecasts

The 266,000 jobs gain shows the labor market "is continuing to provide the key foundation for the U.S. economy.”
Matthew HellerDecember 6, 2019

The U.S. jobs market soared past economists’ expectations in November, belying recession anxieties that had been simmering amid a manufacturing slowdown and trade conflicts.

The Department of Labor reported Friday that employers added 266,00 jobs last month, the largest number since January. The unemployment rate fell to 3.5% from 3.6% in October, matching the lowest jobless rate since 1969.

Economists had forecast job growth of 187,000, reflecting in part the end of a strike at General Motors, and the unemployment rate holding steady at 3.6%.

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While the return of thousands of GM workers helped boost the manufacturing sector, employment gains in November were broad-based, with the service sector particularly strong.

“I think it’s hard not to feel good after getting a jobs report like this,” Robert Rosener, an economist at Morgan Stanley, told The New York Times. “The labor market is continuing to provide the key foundation for the U.S. economy.”

Economists also believe the report offers another reason for the Federal Reserve to hold off on raising the benchmark interest rate when policymakers meet later this month.

“These data should support the ‘on hold’ stance, at least for the time-being,” Rubeela Farooqi, chief U.S. economist for High Frequency Economics, told Yahoo Finance.

In addition to the robust November gains, revisions brought up totals from September to 193,000 and October to 156,000, raising the 2019 monthly average to 180,000, compared with 223,000 in 2018. “Average monthly payroll gains for the past three months reached 205,000, a hefty number for the 11th year of an economic expansion,” the Times noted.

The manufacturing sector added 54,000 positions in November, reversing October’s month’s losses but falling short of a significant upturn. “Manufacturing is still flat after you pull out the returning [GM] strike numbers,” Daniel Zhao, senior economist at Glassdoor said. “It’s still suffering from headwinds from the trade war, but at least it’s not worsening.”

But education and health services industries added 74,000 jobs, more than double these industries’ additions from October. Business services and leisure also saw strong gains, adding 38,000 and 45,000 positions, respectively.