According to the November jobs report also known as the Employment Situation Summary which is usually released by the Bureau of Labor Statistics, the United States economy added 199,000 new jobs. That is above the prediction of 180,000 jobs that economists did forecast for November.
Average hourly earnings in the November jobs report indicate an increase of 0.4%, this is less than the earlier average hourly earnings forecasted. The labor market still seems resilient even despite interest rates being at a 22-year high.
What are Economists Saying?
Economists believe that this jobs report goes hand in hand with the return of striking Auto Workers which has been primarily responsible for the net loss of jobs in the manufacturing industry for a while. Thanks to this, there was an increase of 28,000 new jobs in the manufacturing sector.
Summary of the October Jobs Report
The United States unemployment rate also fell this time to 3.7%. This indicates that despite the labor market gradually cooling, people still see the need to keep their jobs while others even take more than one job. The sectors that were positively impacted mostly are;
- Government +49,000
- Education and health services
+99,000 - Social Assistance +19,000
- Construction +2,000
- Manufacturing +28,000
- Information +10,000
- Other Services +12,000
- Financial Activities +4,000
- Leisure and Hospitality +40,000
The major losing sectors are;
- Mining and logging −1,000
- Transportation and warehousing −5,000
- Professional and business services
−9,000 - Retail trade −38,400
How will the Fed react to the November jobs report?
There are speculations that more jobs at a time like this might mean Americans are taking more than one job.
November job gains indicate that the U.S. economy is staying strong despite the effect of past increments in interest rates by the Federal Reserve still being felt in the market. Investors warn that there are still reasons to worry that the Fed’s actions like the rate hike in December could hurt the economy.
There has always been a clash of ideologies between the Feds and the public when it comes to the right jobs report figure best for the economy. On one hand, consumers have more appetite to spend when they see a strong labor market. An increase in the labor force fuels consumer spending. On the other hand, Federal Reserve officials prefer slower demand as well as slower wage growth as this is believed to bring down inflation.
How Investors are reacting
Investors have stated that they will wait to see the released data on the inflation status of the country next week to know what to expect from the Feds. The Atlanta Federal Reserve has assured Investors that the market is safe none regardless of whether there is a rake hike or not.
Investors at Wall Street are betting that rate hikes will still come but any hike in interest rates might not happen till next year.
With this news, stocks started to react in green immediately after the report. The Dow rose higher than 40 points and the Nasdaq Composite added 0.2%. Even the 10-year Treasury note yields rose to trade at 4.25% and the S&P 500 gained 0.1%.
