In November, 227,000 jobs were added to the economy. (iStock )
In November the increase in the number of jobs was greater than initially expected. Nonfarm employment rose by 227,000, while the unemployment rate rose slightly to 4.2%, the U.S. Bureau of Labor Statistics reported. Healthcare, hospitality and government were largely the driving force behind job growth.
“Although payroll employment rebounded in November with a gain of 227,000 jobs, and previous months were revised upwards by a total of 56,000 jobs, overall the report shows further weakening in the labor market,” said Mike Fratantoni , senior vice president and chief economist of the MBA. said in response to the latest report.
“The household survey showed another large decline in employment, with more households reporting periods of long-term unemployment,” Fratantoni said.
Job growth rates are strong, but with little change in unemployment, many Americans are still struggling to find work. The retail sector was the one that lost the most jobs in November: 28,000 jobs.
Compared to last year, the unemployment rate is still high: 4.2%. This time last year, the unemployment rate was 3.7%.
The healthcare sector had a good month in November, with 54,000 jobs. The employment and leisure sectors added a similar number of jobs last month, at 53,000. This is comparable to the number of jobs the sector added in October.
Government employment also trended upward, adding 33,000 jobs in November, comparable to the average monthly gain of 41,000 in the previous twelve months. The transportation and equipment industries also added another 32,000 jobs, largely thanks to the return of Boeing workers who went on strike in previous months.
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INFLATION SEEING THE LOWEST ANNUAL INCREASE SINCE 2021
The Fed is likely to announce rate cuts in December
A stable labor market and rising unemployment have the potential to influence any rate cuts announced at the Federal Reserve’s December meeting.
“Fed officials have pointed to their ‘data dependence’ when it comes to decisions on future rate cuts,” Fratantonie said. “These data support a cut at the December meeting. MBA predicts the Fed will continue to cut short-term rates through 2025, although they will likely slow the pace of cuts.”
The labor market is starting to stabilize, but is still stagnant, as reflected in unemployment figures. Experts suspect this will lead to interest rate cuts aimed at helping sectors of the economy restart. The results of the inflation report due in mid-December will also contribute to the Fed’s final decision.
After the December interest rate decision, 2025 looks bleak in terms of further interest rate cuts. Many experts expect a slowdown in interest rate cuts.
“The balance of risks is shifting towards fewer interest rate cuts next year,” said Oren Klachkin, national financial markets economist. “They’re going to have to navigate a little bit in the dark, so we think they’ll take it easy.”
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FHFA ANNOUNCES HIGHER MORTGAGE LOAN LIMITS FOR 2025
Consumer confidence is rising for the fifth month in a row
Consumer confidence is variable, but has improved for the fifth month in a row, according to preliminary figures for December. Sentiment for the economy rose by about 3%, the highest in seven months.
The rise in sentiment this month was mainly due to the perception that purchasing certain durable goods would help buyers avoid future price increases. Due to the current economic situation, sentiment may not be maintained if prices continue to rise.
Americans’ political preferences have an effect on their economic sentiment. The December report showed that Democrats saw declining consumer confidence, while Republicans saw growing, and Independents were somewhere in the middle.
Democrats as a whole are concerned about the potential economic impact of future rate increases. Many believe that an increase in rates will lead to a revival of inflation. Republicans believe the opposite and believe that newly elected President Trump will herald a substantial slowdown in inflation.
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SENIORS WILL RECEIVE A MODERATE COST OF LIVING PAYMENTS NEXT YEAR
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