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Employers added 227,000 jobs in November, a recovery from previous month The unemployment rate was 4.2 percent.

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 The U.S. job market rebounded in November, adding 227,000 jobs. This follows a weak October report, which was impacted by hurricanes and labor strikes. The unemployment rate rose slightly to 4.2%.

The November figures reflect a return to work for approximately 37,000 Boeing employees who ended their strike and an estimated 50,000 to 70,000 workers displaced by hurricanes.

While the recent election results have brought some certainty to the economic outlook, it's too early to see any significant impact on the labor market. The Federal Reserve's decision on interest rates in the coming weeks could also influence business expansion.

Early on Friday, financial markets saw a roughly 72% chance of a 25 basis points rate cut at the U.S. central bank's Dec. 17-18 policy meeting, CME's FedWatch tool showed.
The Fed has lowered interest rates by 75 basis points since September, when it launched its easing cycle. Its policy rate is now in the 4.50%-4.75% range, having been hiked by 5.25 percentage points between March 2022 and July 2023.
With the economy continuing to expand at a healthy pace, inflation stuck above the central bank's 2% target and policy uncertainty from President-elect Donald Trump's incoming administration, the outlook for further rate cuts in 2025 is unclear.
Business sentiment perked up in the aftermath of Trump's victory in hopes of fewer regulations. But his promises to raise tariffs on imports and carry out mass deportations have raised concerns of higher prices and disruptions to the labor market.

Traders are betting on another two rate cuts next year, with a better-than-even chance of a third rate by the end of 2025.

 Looking at the various unemployment rates by racial category, we see quite a dispersion. (Some of these tend to be volatile.):

  • The Black unemployment rate jumped to 6.4% from 5.7%
  • Hispanic unemployment went up to 5.3% from 5.1%
  • The Asian rate dipped to 3.8% from 3.9%
  • The White jobless rate held at 3.8%
  • The retail sector lost 28,000 jobs. That doesn’t gel with what has otherwise been a robust holiday shopping season.
  • It was a better month for manufacturing employment due to an extra 32,000 transportation equipment roles that lifted overall manufacturing employment into positive territory -- but it was otherwise a very mixed picture.

    Makers of computers and electronics cut 4,000 roles, and the semiconductor and electronic component sector lost 3,500 jobs. That’s a surprise given this sector is at the center of massive government support -- we’ll need to get some industry insight as to why jobs were lost last month.
  • The headline payroll figure was close to bang in line with expectations, albeit with some solid revisions (+56,000) to the prior couple of months’ data. Moreover, average earnings growth was somewhat firmer than expected at 0.4% on the month and 4.0% y/y. However, the initial market reaction has been driven by the rise in the unemployment rate to 4.2%, which actually isn’t far off the average forecast of economists.

    That being said, it looks like a “weak” 4.2%; the unrounded reading is 4.246%, and it came in the context of (a) a drop in household employment of 355,000 and (b) a drop in the participation rate. All else being equal, you’d normally expect lower participation to lead to lower unemployment. In truth, a modest fixed-income rally is probably justified here; the headline figure was after all distorted by the hurricane/strike reversals, and the household survey was undeniably weak/weaker than expected. That will offset the stronger wage activity, which I think most market participants deem less important at this part of the cycle.

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