The U.S. jobs market beat expectations in November, adding 227,000 jobs after a bleak October report driven by hurricanes and strikes. At the same time, the unemployment rate ticked up to 4.2% from 4.1% in October, according to Labor Department data.
Payroll employment has averaged 186,000 jobs added per month over the last 12 months. While November’s numbers beat the 12-month average, Burning Glass Institute’s Director of Economic Research Guy Berger warns it may not be as impressive as it looks.
“I think this is a pretty ho-hum labor market,” Berger said. “We saw a big gain in jobs. It was expected because we had a bunch of striking workers at Boeing coming back to work, about 40,000 of them, and on top of that, we had a big hurricane last month.”
“You abstract from that noise of all those people coming back to work, and the monthly job gains are probably not very impressive right now,” he added. “The direction is definitely lukewarm.”
Employment in health care and hospitality drove much of the job gains, up 54,000 and 53,000 jobs for the month, respectively. Meanwhile, the retail trade lost 28,000 jobs in November.
The transportation equipment manufacturing sector added 32,000 jobs in November, reflecting workers returning from strike, the Bureau of Labor Statistics said.
BLS also revised up jobs data for the past two months. September was revised up by 32,000, from 223,000 jobs added to 255,000 jobs added. October was revised up by 24,000, from 12,000 jobs added to 36,000 jobs added.
BLS said the monthly revisions are a result of additional reports received from business and government agencies since the last published estimates, along with recalculating seasonal factors.
The Federal Reserve will use this latest jobs report to guide the committee’s next interest rate decision in mid-December. Right now, markets are heavily favoring a 25-basis-point cut.
“The unemployment rate is still moving upward a little bit, though less than they expected, and inflation has gone up more than they expected,” Berger said. “So I think on balance, it sort of says, well, we probably shouldn’t reduce interest rates as much.”
Berger said the Fed is in an uncomfortable spot right now because the data from its two mandates, price stability and maximum employment, are both a little less clear as to what direction they’re heading.