Jobs report bucks expectations as labor market holds solid

MANHATTAN (CN) — The labor market rebounded last month, adding 227,000 new jobs to the U.S. economy

The federal jobs report, released Friday by the U.S. Bureau of Labor Statistics, also revised the last two months’ data upward: October saw 24,000 more jobs gained than initially reported, while September added an extra 32,000.

Hospitality and leisure saw a notable jump of 53,000 jobs in November after essentially flatlining last month, while the health care and government sectors remained strong at 54,000 jobs and 33,000 jobs gained, respectively.

The unemployment rate remained the same at 4.2%, though the jobless rate for Black employees increased slightly. The labor participation rate also remained unchanged at 62.5%.

Hourly earnings also increased once again, this time by $0.13; over the last year hourly earnings have increased by 4%.

“The labor market has stabilized and remains stronger than all of the naysayers have led people to believe,” said Jamie Cox, managing partner at Harris Financial Group. “A stable labor market supports a strong consumer-based economy, and that’s exactly what the data have shown all year long.”

Payroll company ADP’s own employment report showed the private sector added 146,000 jobs last month, about 15,000 fewer jobs than most analysts had predicted.

Nearly all of the gains were among service-providing positions, with education and health care netting about one-third of those jobs. Once again, the South led the pack with 61,000 new jobs, while the other regions added about 30,000 each.

Larger companies, or those with more than 500 employees, also increased employment by 120,000 jobs, with medium companies gaining 42,000 jobs. Companies with fewer than 50 employees struggled, however, losing 17,000 jobs last month.

“While overall growth for the month was healthy, industry performance was mixed,” said Nela Richardson, ADP’s chief economist. “Manufacturing was the weakest we’ve seen since spring. Financial services and leisure and hospitality were also soft.”

The federal government’s job openings and labor turnover survey, known as JOLTS, also showed a resilient labor market as of October. Job openings remained at 7.7 million, despite expectations they would drop slightly. However, they are down 941,000 for the year.

The quits rate, which rose to 3.3 million in October, increased for the first time since May 2023, indicating employees are more comfortable with the strength of the labor market. The quits rate is still down more than 300,000 over the last 12 months.

“The rebound in job openings in October suggests that labor market conditions are stabilizing at a healthy level,” Thomas Ryan, an economist at Capital Economics, wrote in an investor’s note on Tuesday. “Meanwhile, despite a small rebound in the private quits rate, it still points to wage growth slowing sharply.”

Unemployment claims also ticked up slightly, with 224,000 initial claims filed the week ending Nov. 30. Continued claims also increased by about 64,000 to hit 1.7 million for the week ending Nov. 16.

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