You are here
November job growth increases by the most in 10 months; jobless rate falls back to 3.5%
US job growth increased by the most in 10 months in November as former striking workers returned to General Motors' payrolls and the healthcare industry stepped up hiring, confirming that the economy remained on a moderate expansion path despite a prolonged manufacturing slump.
The Labor Department's closely watched monthly employment report on Friday showed steady wage gains and the unemployment rate falling back to 3.5 per cent.
The report validates the Federal Reserve's decision last month to cut interest rates for the third time this year, but signal a pause in the easing cycle that started in July when it reduced borrowing costs for the first time since 2008. US central bank policymakers are expected to highlight the economy's resilience when they meet on Dec 10-11.
Recent reports on the trade deficit, housing and orders for big-ticket goods have offered a fairly upbeat assessment of the economy, but trade tensions continue to loom over the longest expansion, now in its 11th year.
Non-farm payrolls increased by 266,000 jobs last month, with manufacturing recouping all the 43,000 positions lost in October, the government's survey of establishments showed.
Employment growth was also boosted by a gain of 60,200 healthcare workers. That lifted job growth well above its monthly average of 180,000 this year. Economists polled by Reuters had forecast payrolls rising by 180,000 jobs in November.
The economy created 41,000 more jobs in September and October than previously estimated. The 40-day strike by about 46,000 workers at GM plants in Michigan and Kentucky restricted employment gains to 156,000 jobs in October.
Manufacturing activity contracted for a fourth straight month in November. The factory malaise has been blamed on the Trump administration's 17-month trade war with China, which has bruised business confidence and undercut capital expenditure.
Though Washington and Beijing are working on a "phase one" trade deal, the United States has ratcheted up tensions with other trade partners including Brazil, Argentina and France. President Donald Trump said on Thursday that the United States was having meetings and discussions with China "that are going well."
Economic growth estimates for the fourth quarter are converging around a 1.8 per cent annualised rate. The economy grew at a 2.1 per cent pace in the third quarter. Economists estimated the speed at which the economy can grow over a long period without igniting inflation at between 1.7 per cent and 2 per cent.
The surge in November payrolls defied an Institute for Supply Management survey showing a measure of manufacturing employment contracted in November for the fourth straight month. It also confounded the ADP National Employment report showing a sharp deceleration in private payrolls growth last month and consumers' perceptions of the labour market were less upbeat.
But cooler-than-normal temperatures in November curbed hiring at construction sites and mines. REUTERS