You are here
US job growth strong in November, wages rebound
[WASHINGTON] US job growth increased at a strong clip in November and wages rebounded, painting a portrait of a healthy economy that analysts say does not require the kind of fiscal stimulus that President Donald Trump is proposing.
Nonfarm payrolls rose by 228,000 jobs last month amid broad gains in hiring as the distortions from the recent hurricanes faded, Labor Department data showed on Friday. Data for October was revised to show the economy adding 244,000 jobs instead of the previously reported 261,000.
Employment gains in October were boosted by the return to work of thousands of employees who had been temporarily dislocated by Hurricanes Harvey and Irma. November's report was the first clean reading since the storms, which also impacted September's employment data.
Average hourly earnings rose five cents or 0.2 per cent in November after dipping 0.1 per cent the prior month. That lifted the annual increase in wages to 2.5 per cent from 2.3 per cent in October. Workers also put in more hours last month. The average workweek rose to 34.5 hours from 34.4 hours in October.
The unemployment rate was unchanged at a 17-year low of 4.1 percent amid a rise in the labor force. Economists polled by Reuters had forecast payrolls rising by 200,000 jobs last month.
The upbeat report underscored the economy's strength and could fuel criticism of efforts by Trump and his fellow Republicans in the US Congress to slash the corporate income tax rate to 20 per cent from 35 per cent.
"The labor market is in great shape. Tax cuts should be used when the economy needs tax cuts and it doesn't need tax cuts right now," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
"When politics and economics are mixed in the stew, the policies that are created often have a very awful smell," Mr Naroff said before the report was published.
Republicans argue that the proposed tax cut package will boost the economy and allow companies to hire more workers. But with the labor market near full employment and companies reporting difficulties finding qualified workers, most economists disagree. Job openings are near a record high.
The economy grew at a 3.3 per cent annualized rate in the third quarter, the fastest in three years.
While November's employment report will probably have little impact on expectations that the Federal Reserve will raise interest rates at its Dec 12-13 policy meeting, it could help shape the debate on monetary policy next year.
The US central bank has increased borrowing costs twice this year and has forecast three rate hikes in 2018.
Employment growth has averaged 174,000 jobs per month this year, down from the average monthly gain of 187,000 in 2016. A slowdown in job growth is normal when the labor market nears full employment.
The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population. The unemployment rate has declined by seven-tenths of a percentage point this year. Economists believe that the tightening labor market will unleash a faster pace of wage growth next year.
That, combined with the tax cuts, would help to boost inflation. The growth in employment was broad in November.
Construction payrolls increased by 24,000 jobs, thanks in part to rebuilding efforts in the areas devastated by the hurricanes, after rising 10,000 in October.
Manufacturing scored another month of solid job gains, with payrolls increasing by 31,000 jobs after rising 23,000 in the prior month. Retail payrolls grew by 18,700 jobs last month, the largest gain since January, likely boosted by hiring for the holiday season.
Retailers, including Macy's Inc, reported strong Black Friday sales. Macy's said this month it would hire an additional 7,000 temporary workers for its stores to deal with heavy customer traffic in the run-up to Christmas.