The Labor Department has released a stronger than expected November jobs report Friday, buoyed in part by General Motors workers returning to the workforce after a strike.
Tens of thousands of automotive industry workers were added back to November payrolls after returning from a month-long GM strike, giving a boost to October’s lackluster new jobs figure of 156,000, which the report revised upwards from 128,000.
The change in total nonfarm payroll employment for September was also revised up from 180,000 to 193,000, bringing the average job gains figure over the last 3 months up to 205,000 per month.
Monthly revisions come from additional reports submitted by businesses and government agencies, and from the recalculation of seasonal factors.
Manufacturing employment rose by 54,000 in November, the Labor Department said, following a decline of 43,000 in October.
“Within manufacturing, employment in motor vehicles and parts was up by 41,000 in November, reflecting the return of workers who were on strike in October,” the Department said.
“54,000 manufacturing jobs created—erasing the 43,000 decline the month prior largely due to the GM strike. We are now at a new post-Great Recession high in manufacturing jobs,” the Heritage Foundation said in an emailed statement.
Taking into account the strong November figures, job growth averaged 180,000 per month so far in 2019, compared with an average monthly gain of 223,000 in 2018.
“This was a strong report, with a solid rise in payrolls, another drop in the unemployment rate, and decent growth in hourly earnings,” said Chris Low, chief economist at FHN Financial in New York. “The Fed will see this as clear vindication of their decision to stop cutting rates.”
Federal Reserve policymakers are expected to highlight the economy’s resilience when they meet on Dec. 10-11, though trade tensions continue to reverberate in the background.
The report added to other fairly upbeat reports on the trade deficit, housing, and orders for big-ticket goods. Together, the improving data validates the Federal Reserve’s decision last month to cut interest rates for the third time this year, but signal a pause in the easing cycle that started in July when it reduced borrowing costs for the first time since 2008.
Unemployment Rate
The unemployment rate was 3.5 percent, the U.S. Bureau of Labor Statistics reported.The jobless rate broke below 4 percent in April 2018 and has stayed at or under that level for 20 straight months, which represents the longest such stretch since the 1960s.
Job Gains Across Industries
“Notable job gains occurred in health care and in professional and technical services,” the Labor Department said. “Employment rose in manufacturing, reflecting the return of workers from a strike.”While manufacturing jobs grew by 54,000 overall, employment in major industries—including construction, wholesale trade, information, and government—showed little change in November, the Department said.
Mining lost 7,000 jobs in November, with the bulk of the losses in support activities for mining.
Health care added 45,000 jobs in November, with 34,000 job gains in ambulatory health care services and 10,000 in hospitals. Over the past 12 months, the health care sector has added 414,000 jobs in total.
Jobs in professional and technical services grew by 31,000 in November and by 278,000 over the last 12 months.
Employment in leisure and hospitality increased by 45,000, with 219,000 jobs added in this industry in the past 4 months.
Transportation and warehousing saw November job growth of 16,000, with warehousing and storage rising by 8,000 and couriers and messengers by 5,000.
Financial activities employment grew by 13,000, with the industry noting job gains of 116,000 in the last 12 months.
Dollar Rises on Robust Jobs Report
The dollar made modest gains on Friday after five straight days of losses, bolstered by strong job growth data.In midmorning trading, the DXY dollar index gained 0.3 percent to 97.674. For the week, the dollar was down 0.6 percent, its largest weekly loss in six weeks.
“No question today’s jobs report is strong, but is it strong enough for people to change their views about the economy?” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
Recession Less Likely: Expert Survey
Some two dozen top economists told Bankrate in a Q4 poll that there was a 35 percent chance of a recession in 2020, compared to a 41 percent chance expressed in a similar Q3 survey.“Comments from the panel were consistent with the previous month, with sentiment improving compared to October,” Timothy Fiore, Chair of the ISM Business Survey Committee, said in a release.
Bankrate’s survey results come as the U.S. services sector activity slowed in November, and worker shortages pushed production to its lowest level in a decade, with the potential to heighten fears about the economy’s health.
Data released on Wednesday showed private employers hired the fewest workers in six months in November. Monday data, meanwhile, showed manufacturing activity contracted for the fourth straight month in November and that construction spending fell in October.
Despite the manufacturing slump and second straight monthly drop in construction outlays, growth expectations for the fourth quarter have been boosted by upbeat reports on the trade deficit, housing, and business investment.
While the economy grew at a 2.1 percent pace in the third quarter, the ISM report noted an annualized GDP growth rate of 1.5 percent.
“The past relationship between the PMI [purchasing managers index] and the overall economy indicates that the PMI for November (48.1 percent) corresponds to a 1.5-percent increase in real gross domestic product (GDP) on an annualized basis,” Fiore said.
