Unemployment remained historically low in November as the number of new jobs soared past economists’ forecasts, according to data from the Bureau of Labor Statistics released Friday.
Total nonfarm employment increased by 263,000 last month, surpassing analysts’ expectations of 200,000 new positions. The unemployment rate was 3.7% last month, which is unchanged from the prior month.
“The November employment report delivers a holiday season package of good news for American workers, including a strong increase in wages,”Greg McBride is a Senior Economic Analyst for Bankrate. He made the comments to The Daily Wire. “In keeping with the classic divide sometimes seen between Main Street and Wall Street, the report tells the Federal Reserve it has more work to do in its battle against inflation, meaning higher interest rates to come.”
Officials have been looking at employment data since the end of three years’ worth of aggressive monetary stimuli, which included near-zero federal funds rate target and purchase of securities of market players. Four times in a row, policymakers raised interest rates by 34 of a point. This caused havoc on the housing market as well as raising costs for businesses and consumers borrowing money.
Industries like leisure, hospitality, healthcare and government as well as manufacturing were among those that saw an increase. “generally good distribution of job growth,”McBride who noted that “retailing as well as warehousing and distribution posted job declines”This is a shocking reality that will impact the holiday season. Amazon and FedEx announced plans to layoff employees before the crucial period of logistics companies. The former will cut employees in human resource, devices and retail while FedEx will furlough drivers.
As the available positions exceed the available workers, businesses have experienced labor shortages. “There continues to be a detrimental disconnect or imbalance between the supply and demand for labor,” McBride continued. “Demand broadly appears to remain remarkably strong, but any number of factors are continuing to weigh on the supply of prospective workers with labor force participation falling over the past two months and still below pre-pandemic levels.”
Federal Reserve Chair Jerome Powell commented Wednesday on the state of the labor market. “participation gap”This is in large part due to “excess retirements”That was beyond all reasonable expectations. “what would have been expected from population aging alone,”Many young adults return to the work market even though they are still in their twenties.
Nominal wages gained less than expected due to rising prices. This indicates a decrease in household purchasing power. Although the average hourly wage rose by 5.1% in November over the previous year, the Bureau of Labor Statistics’ most recent inflation report showed that there was 7.7% inflation at the end of October. However, price levels data have not been published for the last month.
Federal Reserve officials will most likely continue to raise interest rates due to the robust employment data. Analysts have criticised policymakers’ inability to control inflation quickly after an extended increase in the money supply.
“The Federal Reserve checks the box off on this report now less than two weeks away from its next policy-setting session,”McBride commented. “In any case, Federal Reserve officials are intent on raising the benchmark rate further into restrictive territory. Even if the central bank eases up as expected on the magnitude of rate increases, the journey likely continues in 2023 toward a higher ultimate rate destination in the pursuit of restraining inflation.”
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