227,000 jobs were added to the economy in November. (iStock )
In November, the number of employees increased more than initially expected. Nonfarm employment increased by 227,000 people, and the unemployment rate rose slightly to 4.2%. Published by the U.S. Bureau of Labor Statistics.. Healthcare, services, and government industries were the main drivers of employment growth.
MBA Senior Vice President and Chief Economist Mike Fratantoni said, “Employment numbers rebounded in November with an increase of 227,000 jobs, an upward revision of 56,000 cumulative jobs in previous months. Overall, the report shows a further softening of the labor market.” In response to the latest reports, he said:
“The Household Survey once again shows a significant decline in employment, with more households reporting long-term unemployment,” Fratantoni said.
Although the job growth numbers are strong, the unemployment rate has changed little and many Americans are still struggling to find work. The retail industry lost the most jobs in November, with 28,000 jobs lost.
Compared to last year, the unemployment rate remains high at 4.2%. This time last year, the unemployment rate was 3.7%.
The health sector performed well in November, adding 54,000 jobs. The employment and leisure industry also added 53,000 jobs last month. That's about the same number of jobs the industry added in October.
Government employment is also on the rise, adding 33,000 jobs in November, compared to an average monthly increase of 41,000 over the past 12 months. Transportation and equipment manufacturing similarly added 32,000 jobs. This was largely due to the return of Boeing employees who had gone on strike in the previous month.
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Inflation rate hits lowest annual rise since 2021
The Fed is likely to announce rate cuts in December
A stable job market and rising unemployment could undermine the rate cuts scheduled to be announced at the Federal Reserve's December meeting.
“Fed officials have cited a 'data reliance' on decisions about future rate cuts,” Fratantoni said. “These data support a rate cut at the December meeting. The MBA expects the Fed to continue lowering short-term rates in 2025, but the pace of rate cuts is likely to slow.”
Although the labor market is starting to stabilize, it remains stagnant, as evidenced by the unemployment rate. Experts suspect that this will lead to interest rate cuts aimed at helping sectors of the economy reopen. The results of the inflation report, scheduled to be released in mid-December, will also contribute to the Fed's final decision.
After the December interest rate decision, there is uncertainty regarding further interest rate cuts in 2025. Many experts expect the pace of interest rate cuts to slow.
“The risk balance is shifting towards a smaller rate cut next year.” Oren Krachkin saidNational financial market economist. “I think it's going to be slow because they're going to be going through a little bit of darkness.”
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FHFA Announces Mortgage Loan Limit Increases in 2025
Consumer sentiment rises for 5 consecutive months
Consumer sentiment was mixed, but improved for the fifth consecutive month. Provisional figures for December revealed. Sentiment about the economy rose about 3%, the highest level in seven months.
This month's increase in sentiment is primarily due to the realization that purchasing certain durable goods can help buyers avoid future price increases. Given the current economic situation, sentiment may not be sustainable if prices continue to rise.
Americans' political leanings influence economic sentiment. The December report found that consumer sentiment among Democrats is deteriorating, while Republicans are expanding, and independents are somewhere in the middle.
Democrats as a whole are concerned about the potential economic impact of future tariff increases. Many believe that higher tariffs will lead to a resurgence of inflation. Republicans believe the opposite, believing that President-elect Trump will bring about a significant slowdown in inflation.
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Seniors could receive a moderate cost-of-living increase next year in their Social Security payments
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