The U.S. economy added 227,000 jobs in November according to the Bureau of Labor Statistics (BLS) survey of employers. The increase was slightly above expectations for a gain of 220,000. Job gains in the prior two months were revised higher by 56,000. The economy added 172,700 jobs on average over the trailing 3 months versus a 212,300 average at the end of 2023. November’s report saw a reversal of most of the transportation strike effects seen in the October data. Education and health care sector gains lead both the one- and three-month increase. The retail sector lost jobs in 5 of the last 6 months.

The BLS’s survey of households reported an increase in the unemployment rate to 4.2% in November from 4.1% in the prior month. The size of the U.S. labor force decreased by 193,000 while the survey of households revealed an increase in the number of unemployed individuals by 161,000.     

Average hourly earnings – a proxy for wage growth – rose 0.4% for the month and 4.0% vs. a year ago. The monthly data was above consensus expectations of a 0.3%. The 3-month annualized rate of wage growth decelerated to 4.5% from 4.8% in the prior month. 

Source: Bloomberg, U.S. Bureau of Labor Statistics.
 

Bottom line:  November’s data corrected for some of the distortion in October from strikes and weather. Jobs and wages appear to be on a more gradual pace of deceleration than seen in the summer, but are slower, nonetheless. The Federal Reserve (Fed) has been waiting for data to support their decision at the December 18^th meeting and today’s report should tilt the Committee toward another cut of 0.25%. Markets increased the odds of another a cut to nearly 90% following today’s data (as of 9 am ET), although the Fed will see an important inflation data point with the release of November CPI on December 11th. Equity futures and credit markets had a moderately positive tone following the report, reflecting expectations of further monetary easing.

Gary Pzegeo, CFA, is co-chief investment officer of CIBC Private Wealth. His responsibilities include chairing the Asset Allocation Committee and overseeing the investment administration, portfolio oversight, and fixed income and equity trading functions.