Dec 8, 2023 - Business

U.S. unemployment rate falls to 3.7% in November

A worker operates a wood milling machine in Provo, Utah. Photo: George Frey/Bloomberg via Getty Images

The U.S. labor market added 199,000 jobs in November, while the unemployment rate fell to 3.7% from 3.9%, the Labor Department said on Friday.

Why it matters: The jobs market surprised to the upside, with more jobs than economists anticipated, easing concerns that the labor market is rapidly cooling.

  • Economists expected the economy to add 185,000 jobs last month.
  • The Labor Department also said the economy added 262,000 jobs in September — 35,000 fewer than initially estimated. In October, the economy added 150,000 jobs.

The big picture: The data comes as the Federal Reserve considers whether further interest rate increases are necessary to slow the economy down to get inflation back to its 2% target.

  • The central bank is expected to hold rates steady again at its policy meeting next week, though economic forecasts set to be released could signal whether there is an appetite to continue to raise rates.

Where it stands: The Fed's prior interest rate increases have, so far, resulted in little economic pain for workers. That is still apparent in the payrolls report released on Friday.

  • Average hourly earnings, a gauge of wage growth, rose by 0.4% last month. Compared to the prior year, average hourly earnings rose 4%.
  • The share of the population with a job rose to 60.5%, up 0.3 percentage points from the prior month.

Among the sectors that saw the biggest wage gains: health care (+77,000) and government (+49,000). The manufacturing sector added 28,000 jobs, reflecting the return of striking auto workers.

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