The November jobs report is out and it’s a beat.
In November, the U.S. economy added 228,000 jobs, more than expected by economists, while the unemployment rate held steady at 4.1%.
Wall Street economists were forecasting nonfarm payroll gains of 195,000 in November, down from October’s 261,000 jobs added to the economy; this figure was revised down slightly on Friday to show that 244,000 jobs were created in October. The unemployment rate, which fell to its lowest since December 2000 in October, was expected to remain unchanged at 4.1%.
Wage gains were disappointing, however, rising 0.2% over the prior month and 2.5% over last year. Economists were forecasting average hourly earnings to rise 0.3% over last month and 2.7% over last year.
Signs of a pickup in wages have been closely tracked by economists in recent years for any indication that inflation pressures are building in the economy, which could prompt the Federal Reserve to raise rates faster than expected.
Friday’s report comes just a few days before the Fed’s next monetary policy decision, set for Wednesday, December 13, at which the central bank is widely expected to announce its third interest rate increase of the year.
Other numbers markets were keeping an eye on in Friday’s report included the labor force participation rate, which held steady at 62.7% in November, and the underemployment rate — which captures those out of work as well as those who are working part-time but want full-time work — which rose slightly to 8% in November after hitting a 10-year low of 7.9% in October.
Following the release of Friday’s report, U.S. stock futures were higher with Dow futures up 67 points, S&P 500 futures up 8 points, and Nasdaq futures up 38 points.
Friday’s report also kept alive a trend of November readings on the labor market topping expectations, with this number marking the sixth time in the last nine years that the initial report of job gains during November has exceeded Wall Street forecasts.
By industry, goods-producing jobs had a notably strong month, with 31,000 jobs being added to the manufacturing sector and 24,000 construction jobs created in November. The manufacturing unemployment rate is now at 2.6%, a record low.
The services sector, which accounts for about 85% of GDP, added 159,000 jobs in November, with education and health services and professional and business services leading the way as these sectors added 54,000 and 46,000 jobs, respectively.
The retail sector also added 18,000 in November, reversing a trend that has seen the sector shed jobs at a rapid rate this year. Paul Ashworth, chief U.S. economist at Capital Economics, said Friday this indicates that brick and mortar retailers likely had a good Black Friday to begin the holiday shopping season.
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Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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