A “Help Needed” sign hangs in the window of a restaurant in Medford, Massachusetts, January 25, 2023.
brian snyder reuter
Nonfarm payrolls rose slightly more than expected in November, the Bureau of Labor Statistics released Tuesday, in numbers whose release was delayed due to the government shutdown.
Employment growth for the month totaled 64,000 jobs, exceeding the Dow Jones Industrial Average’s forecast of 45,000 jobs.
The unemployment rate rose to 4.6%, higher than expected.
In addition to its November report, the BLS released a shortened tally for October showing that payrolls decreased by 105,000 jobs. Although there were no official estimates, Wall Street economists had largely expected a decline after September’s unexpected increase of 108,000 jobs.
October’s slump was due to a significant drop in government employment as the furlough scheme came into effect, which was postponed earlier this year. Government payrolls fell by 162,000 in the same month, and by another 6,000 in November.
Nevertheless, October’s decline marked the third time in six months that payrolls were at a net negative level. The BLS report also showed that the August statistics were revised downward by 22,000 cases, representing a significant decrease of 26,000 cases, and the original statistics for September were revised downward by 11,000 cases.
The BLS had warned that the Household Survey, which is used to calculate the unemployment rate, would be affected for several months by the shutdown. Both the employment report and the closely watched consumer price index were canceled because October’s statistics were difficult to obtain.
Despite the complex situation, the report painted a familiar picture of the labor market.
The employment situation continues to be affected by low hiring and firing numbers, as strict border practices under President Donald Trump deplete the workforce with a regular influx of immigrants.
From a policy perspective, the Fed has been forced to walk a difficult line between preventing further deterioration in the labor market while also preventing persistently high inflation from worsening.
At its most recent meeting, the central bank cut its key interest rate by a quarter of a percentage point, but signaled the hurdles for further rate cuts are even higher. The Fed has approved its third consecutive rate cut since September, lowering the benchmark fund rate to its target range of 3.5% to 3.75%.
Fed officials have maintained that the labor market is not a source of inflation, and Tuesday’s jobs report supported that claim.
The average hourly wage increased only 0.1% in the same month, lower than the expected 0.3% increase, and increased 3.5% year-on-year, the smallest annual increase since May 2021.
This is breaking news. Please refresh to check for updates.
