There was a lot of important information on the U.S. economy released this week, but the biggest data point is without a doubt the latest monthly job report from the Bureau of Labor Statistics (BLS) out this morning. Indeed, total nonfarm employment in America rose by 228K payrolls in November, down slightly from October but well above expectations. There was a net upward revision of 3K payrolls to the September and October figures, which altogether resulted in an average rate of job growth of 170K during the past three months. That is near the bottom-end of the range for the past few years but still comfortably above Federal Reserve (Fed) officials’ estimates for what is needed to keep up with U.S. population growth.
As for joblessness in America, the official unemployment rate (U-3) held at 4.1 percent in November, and the underemployment rate (U-6) edged higher from the cycle low to 8.0 percent. Other highlights include that the rates of joblessness for manufacturing workers, Hispanic Americans, and people without a high school diploma all fell to record lows in November. One clear negative in this report, though, is average hourly earnings, which rose by just 0.2 percent in November. That is a smaller gain than anticipated and the prior month’s figure was revised lower. Although disappointing, the continued combination of very low unemployment and modest nominal wage growth suggests that the economy still has some room to run before igniting inflation. Regardless, the market-implied probability of another interest rate hike at next week’s Federal Open Market Committee (FOMC) meeting remains close to 100 percent.
Sources: Econoday, U.S. DoL, Twitter, Bloomberg, FRBSLPost author: Charles Couch