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In sign of resilience, US labor market adds 263,000 jobs

The job market has so far been unfazed by the Federal Reserve’s aggressive efforts to put the brakes on economic growth.

(CN) — Job growth in the U.S. once again beat expectations in November, as the economy added 263,000 jobs while the unemployment rate stayed at a low 3.7%.

Last month’s gains were only slightly lower than the previous two months and beat economists’ predictions of about 200,000 new jobs.   

Wages were also up 0.6% from October and 5.1% over the past year, according to a Labor Department report released Friday morning.

“The U.S. labor market has lost some momentum this year, but it’s still speeding ahead as we approach the new year,” said Nick Bunker, economic research director for North America at career site Indeed. “Employers are still adding jobs at a rate well above trend growth, unemployed workers are still finding jobs at elevated rates, and wage growth is still robust.”

The job market has remained strong despite aggressive interest rate hikes made by the Federal Reserve in an attempt to cool down the economy in the face of surging inflation, which hit a four-decade high this summer. The central bank has so far raised interest rates by 0.75%, or 75 basis points, four times this year.

Paul Ashworth, chief North America economist at Capital Economics, said he expects inflation to subside despite strong job growth.   

“The resilience of the labor market and the resurgence in wage pressures don’t change our view that core price inflation is going to fall more rapidly than the Fed believes, and we still expect officials to slow the pace of tightening, with a smaller 50 [basis point] hike later this month,” Ashworth wrote.

The leisure and hospitality industry, which was hit hardest by Covid-19 lockdown orders, led the way in hiring last month with the addition of 88,000 positions, including 62,000 at food and drinking establishments. Despite averaging 82,000 new jobs a month this year, the sector is still down 980,000 compared to its pre-pandemic level.

Health care payrolls rose by 45,000 in November, another strong showing for an industry that is making big gains from last year. So far, it is averaging 47,000 new positions a month in 2022, compared to 9,000 a month in 2021.  

There were 23,000 more jobs in the social assistance field last month, and 20,000 more in construction. The information sector added 19,000 jobs, while manufacturing and financial activities each gained 14,000.

The retail sector lost 30,000 positions overall, with most payroll cuts happening at general merchandise stores. Employment in transportation and warehousing fell by 15,000.

In the public sector, local government hiring surged by 32,000. State government employers added 11,000 positions, while 1,000 jobs were lost at the federal level.

Overall, the American economy is averaging 392,000 new jobs a month this year, and 282,000 over the past three months.

“Continue to underestimate the momentum of the U.S. labor market at your own peril,” Bunker wrote. “Jobs continue to be added at a pace that would have drawn cheers in 2019 and wages aren’t slowing as much as expected.”

The job market might hit a few bumps in the road next year, Bunker said, “but it’s heading into 2023 cruising.” 

In a statement Friday, outgoing House Speaker Nancy Pelosi heaped praise on President Joe Biden and congressional Democrats for the ongoing streak of robust job growth.

“During the 117th Congress, Democrats have enacted a robust, job-creating economic agenda that has propelled our nation from the depths of the pandemic,” Pelosi said. “Our American Rescue Plan got millions of Americans swiftly, safely back to work – with vaccines in arms and necessary relief for small businesses.”

She added the Inflation Reduction Act, passed in August, “is projected to create 9 million new jobs in clean energy industries as part of our landmark effort to combat the climate crisis, while bringing down the cost of prescription drugs, health care and energy bills for our families.”

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