Employment increased by 199,000 jobs in November, with the unemployment rate edging down to 3.7%, according to the U.S. Bureau of Labor Statistics. The latest job report highlights mixed trends in the labor market, as gains were observed in sectors such as healthcare and government, while employment in retail trade witnessed a decline.
The results have already moved markets.
“Interest rates jumped in response to this report, as job market strength may be enough to keep the Fed cautious with respect to any comments regarding the path for rates at their December meeting," Mortgage Bankers Association Chief Economist Mike Fratantoni, said. "Inflation is declining, but further declines are likely dependent upon some slowing in the job market. We continue to forecast that the Fed will begin to cut rates in the spring of 2024, as job market trends are likely to weaken from here.”
According to the numbers, Fratantoni said they "paint a picture of a job market that is still strong, even though the number of job openings has declined, and at least some sectors are seeing an increase in layoffs."
First American Economist Ksenia Potapov said the job gains are well below the average monthly gain of 240,000 over the prior 12 months.
“November’s jobs report broadly signals that the labor market is cooling but remains strong, which is good news for the Fed and means that the likelihood of another rate hike remains low," she said.
According to the data released, the healthcare sector added 77,000 jobs in November, surpassing the average monthly gain of 54,000 over the past year. Job growth was particularly notable in ambulatory health care services, hospitals, and nursing and residential care facilities.
Government employment also saw an increase, with 49,000 jobs added in November, aligning with the average monthly gain of 55,000 over the past year. The uptick in government jobs was primarily driven by local and state government.
Manufacturing employment rose by 28,000 in November, primarily due to an increase of 30,000 jobs in motor vehicles and parts, as workers returned from a strike. Despite this, manufacturing employment has remained relatively stable over the year.
The leisure and hospitality sector continued to trend upwards, adding 40,000 jobs in November, largely driven by employment gains in food services and drinking establishments. Over the past year, this sector has consistently added an average of 51,000 jobs per month.
The bad news for the mortgage industry was that construction remained flat.
“We expect that homebuilders will continue to be the key source of housing supply next year, so we might see further employment growth in the sector, even if the economy slows as we anticipate," Fratantoni said.
The report also showed that retail trade employment experienced a decline of 38,000 jobs in November, with notable losses in department stores and furniture, home furnishings, electronics, and appliance retailers.
The information sector showed little change in employment (+10,000), with a notable gain in motion picture and sound recording industries offsetting losses in other areas. Despite this, the information industry has seen a net decline of 104,000 jobs since reaching a peak in November 2022.
Transportation and warehousing employment remained relatively stable in November, with a minor loss of 5,000 jobs, primarily attributed to declines in warehousing and storage. The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.4 hours in November, with average hourly earnings for all employees on private nonfarm payrolls rising by 0.4 percent to $34.10.
The latest report also included revisions to previous months, with the change in total nonfarm payroll employment for September revised down by 35,000 jobs. However, October remained unchanged.
