The U.S. employment report for November exceeded expectations, six times higher than the previous month, but the unemployment rate also increased: the Fed becomes more cautious ahead of its interest rate decision.
On December 6, the U.S. Bureau of Labor Statistics reported that non-farm employment in November had rebounded beyond expectations. The previous month, jobs had plunged due to the impact of the strike and natural disasters.
Non-farm payrolls increased by 227,000 in November, six times the revised increase of 36,000 jobs in October. The actual number of jobs in November also exceeded Dow Jones' forecast of 214,000 new jobs.
Job growth is primarily in the healthcare sector (54,000), entertainment and hospitality (53,000), and public employment (33,000). These are the sectors that have led job growth in recent years. Meanwhile, the retail sector recorded a decrease of 28,000 jobs ahead of the holiday season.
However, the unemployment rate increased slightly to 4.2%. The unemployment rate rose as the labor force participation rate decreased slightly and the labor force also declined. A broader measure that includes discouraged workers and part-time workers for economic reasons increased slightly to 7.8%.
Wages for workers continue to rise, with average hourly earnings increasing by 0.4% compared to the previous month and rising 4% compared to the same period last year. Both figures have increased by 0.1% compared to forecasts.
The futures stock market rose after the employment data was released. Meanwhile, U.S. Treasury yields fell.
The November employment report raises questions about the state of the labor market and the impact of this data on the Federal Reserve's interest rate decision.
After the employment report was released, traders predicted an 88% chance that the Fed will cut interest rates after this month's meeting. Policymakers will make a decision on December 18.
Earlier this week, Fed Chairman Jerome Powell stated that the strong economic situation requires him and his colleagues to be patient when making interest rate decisions. Other officials indicated that another rate cut is likely but will depend on economic data.
According to CNBC