U.S. Job Report Again Impresses

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Employers in the United States added 228,000 jobs during the month of November, ahead of economists’ expectation for an increase of 195,000. The unemployment rate was unchanged from the already low level of 4.1%. The average workweek also edged higher to 34.5 hours, but average wage growth remained relatively tepid at 2.5%, particularly when compared to inflation of 2.0% over the previous year. The labor force participation rate, at 62.7%, was unchanged from October.

Workers laid off following a particularly severe storm season boosted November’s report, following disruption in September and October. As many as 50,000 employees in Texas, Georgia, and Florida who returned to work following Hurricanes Harvey and Irma were not counted in October’s job report, but are in November’s.

Year-to-date job growth has now averaged 174,000 per month. That figure is fairly strong – it takes about 140,000 jobs each month to match population growth – but is down from last year’s average gain of 187,000. Real wage growth is also only averaging a gain of 0.5% this year compared to last year’s gain of 1.3%, although that difference is entirely because of a pick up in inflation this year.

The United States employment market through the monthly averages of key metrics going back to the end of the last recession in 2009.


Average monthly job growth, 2009-2017 (in thousands of jobs).


The unemployment rate and employment to population ratios, 2009-2017.


Interest rates have ticked up slightly following the jobs report, with the 10-year treasury now yielding 2.39%, up from 2.37%. The 5-year treasury is now yielding 2.16%, up from 2.14% yesterday. The jobs report does nothing to change expectations for another quarter-point rate hike at the next FOMC meeting next week. It would be the third hike this year and put the Fed’s targeted overnight lending rate at 1.5%.






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