The U.S. labor market showed a significant rebound in November, with the addition of 227,000 jobs. This follows an increase of 36,000 jobs added in October due to two major hurricanes and the Boeing Co. strike that affected employers’ payrolls. The labor demand and employment report indicate a slow and steady, yet overall healthy labor market that reinforces economic growth.
With the November jobs report revealing the current employment situation, all eyes are on the Federal Reserve’s upcoming meeting in December, as its decision on cutting rates will influence the economic condition for the upcoming year. The civilian labor force in the United States remained at 168 million people, with an increase of 159,000 people over the year.
The labor force participation rate declined to 62.5%. The employment-population ratio fell to 59.8%, showing a 0.6% decline since November 2023. According to the U.S. Bureau of Labor Statistics establishment survey data, total nonfarm payroll employment — which includes individuals working in major businesses and industries and excludes agriculture, government and private households — consisted of 161.1 million employees.
Key industries saw strong job growth, including healthcare with 54,000 jobs, leisure and hospitality with 53,000, government with 33,000, transportation equipment manufacturing with 32,000 and social assistance with 19,000. However, the retail trade lost 28,000 jobs, particularly in general merchandise retail.
In November, 133.4 million people had full-time working status, while 27.7 million were employed part-time. Some employees in part-time roles preferred full-time positions but were unable to secure them or experienced a cut in their working hours. The number of individuals working part-time for economic reasons increased from 4 million to 4.5 million over the past year.
Despite the robust job growth, there are challenges seen in certain economic factors as more individuals join the labor market for employment. The unemployment rate rose from 4.1% to 4.2% in November 2024, remaining above 4% for six consecutive months since 2021, based on recent data from the BLS. The rate increased from 3.7% in November 2023, with the number of unemployed people increasing from 6.3 million to 7.1 million.
In addition, the inflation rate increased from 2.4% in September to 2.6% in October. The Personal Consumption Expenditures Price Index is reported as 2.3% in October, a 0.2% increase from September.
Consensus estimates on FactSet indicate that economists anticipated 207,500 additional jobs in November and a 4.1% unemployment rate. As economists forecast the third rate cut of the year, Federal Reserve Chair Jerome Powell said the Federal Open Market Committee will practice a cautious approach to reduce interest rates amid economic growth and inflation.
“The downside risks appear to be less in the labor market, growth is definitely stronger than we thought, and inflation has come in a little higher,” Powell said during The New York Times’ DealBook Summit. “So, the good news is that we can afford to be a little more cautious as we try to find neutral.” Although Powell did not mention whether the Fed will lower interest rates or delay the cuts, he said the Fed will consider complex economic factors when making its decisions.
