Payrolls rose by 227,000 in November, more than expected. Unemployment rate 4.2 percent

Job creation in November was almost at a standstill from the previous month as the effects of a major labor strike and violent storms in the Southeast eased. Bureau of Labor Statistics reported on Friday.

Nonfarm payrolls rose 227,000 for the month, compared with an upwardly revised 36,000 in October and the Dow Jones consensus estimate of 214,000. The September payrolls count was also revised up to 255,000, up 32,000 from the previous estimate. October numbers were hampered by the effects of Hurricane Milton. Boeing The strike

As expected, the unemployment rate rose to 4.2 percent. The number of unemployed increased as the labor force participation rate declined and the labor force itself declined. A broader measure that includes discouraged workers and those who hold part-time jobs for economic reasons rose slightly to 7.8 percent.

The data likely gives the Federal Reserve the green light to cut interest rates later this month.

“The economy continues to produce healthy amounts of jobs and income growth, but further increases in the unemployment rate dampen some of the luster in the labor market and give the Fed what it needs to cut rates in December. is,” said Alan Zenter, chief economic strategist at Morgan Stanley Wealth Management.

Job gains were concentrated in health care (54,000), leisure and hospitality (53,000) and government (33,000), sectors that have steadily increased payrolls over the past few years. Social assistance increased the total by 19,000.

At the same time, retail trade saw a 28,000 drop over the holiday season. With Thanksgiving coming later than usual this year, some stores have put hiring on hold.

Workers’ pay continued to rise, with average hourly earnings up 0.4% from a month ago and 4% on a 12-month basis. Both numbers were 0.1 percent higher than expectations.

Stock market futures rose after the report, while Treasury yields were lower.

The report comes with questions about the state of the labor market and how that will affect the Federal Reserve’s decisions on interest rates.

Traders quickened their bets on a rate cut after the payrolls release, with market odds for a quarter-percentage point drop rising above 88 percent. When central bank policymakers make their next decision on December 18.

“This morning’s data was a Thanksgiving buffet with payrolls spot on, revisions positive, but unemployment rising even as the participation rate fell,” said Lindsay Rosner, head of multi-service investing at Goldman Sachs Asset Management. ” “This print doesn’t kill the holiday spirit and the Fed is on track to deliver a cut in December.”

Earlier this week, Fed Chair Jerome Powell said the generally strong state of the economy gives him and his colleagues the ability to be patient when making interest rate decisions. Other officials have said they see further rate cuts as likely but subject to changes in economic data.

While inflation is far from ebbing from its 40-year high in mid-2022, recent months have seen prices rise. At the same time, the October jobs report and various other reports pointed to a labor market that is still growing but slowing.

Household surveys, which are used to calculate the unemployment rate, paint a different picture than establishment surveys that provide headline payrolls counts.

According to the BLS, domestic employment declined by 355,000 monthly even as the labor force contracted by 193,000. The labor force participation rate, which measures the share of the working-age population either at work or looking for a job, fell 0.1 percentage point to 62.5 percent.

Full-time workers fell by 111,000, while part-time workers fell by 268,000.

The unemployment rate for black workers rose 0.7 percentage points to 6.4 percent.