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U.S. job juggernaut rolled on in November; nonfarm payrolls up 263,000

Economic Indicators Dec 02, 2022 08:38AM ET
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By Geoffrey Smith

Investing.com -- The U.S. labor market juggernaut refused to slow down in November, as job creation held up despite increasing signs of layoffs across the economy.

Nonfarm employment grew by 263,000 through the middle of the month, well above the 200,000 consensus forecast. October's number was also revised up by 23,000 to show a gain of 284,000.

The payrolls gain was only one element of a report that signaled ongoing tightness throughout the labor market. Average hourly earnings rose by 0.6% to push annual earnings growth back up to 5.1%. Here, too, October's data was revised up from an initial estimate of 0.4% to 0.5%.

Moreover, the buoyant jobs market again failed to lure sidelined workers back into the labor force. The participation rate fell to 62.1% from 62.2%.

The numbers vindicated the fears of those who see the U.S. economy as increasingly held back by a shortage of workers.

"Increasingly, I fear we are moving to an environment where labor is short, not long," Richmond Federal Reserve President said in a speech prepared before the release. "Labor supply looks like it will remain constrained."

The numbers hurt hopes for a quick end to interest rate increases by the Federal Reserve, which had risen in recent days as Chair Jerome Powell repeated that the central bank's next step will likely be smaller than the 75 basis point increases seen at each of the last four meetings.

By 08:45 ET (13:45 GMT), S&P 500 Futures were down 1.6%, while Dow Jones Futures were down 1.3%, and Nasdaq 100 Futures were down 2.3%. By contrast, the Dollar Index, which tracks the greenback against a basket of developed economy currencies, was up 0.6% at 105.38 and interest rate-sensitive 2-Year Treasury note yield was up 13 basis points at 4.38%.

Analysts said the report made it more likely that the Fed would have to continue tightening policy to tame inflation, even at the cost of a recession.

"I was allowing myself to get more hopeful about a soft landing...but this pretty much dashed that hope," tweeted Peterson Institute fellow Jason Furman, pointing to big upward revisions in hourly earnings in both of the last two months. That, together with a picture of slowing productivity growth, suggests that the labor market is still generating plenty of inflationary pressure, he argued.

"You probably want to revise your views on inflation and it’s overall dynamic more based on today’s jobs report than any other data report this entire year. And not in a favorable direction," Furman said.

On a sectoral breakdown, there were big gains in employment in the hospitality and leisure sector again, with manufacturing and construction also continuing to trend up. However, there were also increasingly visible pockets of weakness in consumer-facing sectors at the start of the key holiday season, with retail, transportation, and warehousing all shedding jobs.

"Retail hiring has been much lower so far this holiday season compared to any year in the 2010s," said Daniel Zhao, chief economist with Glassdoor.

U.S. job juggernaut rolled on in November; nonfarm payrolls up 263,000
 

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Comments (34)
JIM VETTER
JIM VETTER Dec 03, 2022 8:30AM ET
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And yet the markets slowly recovered all day to end barely red. Total manipulation. We know, had it been softening of the labor market, the markets wouldn't shot up 10+ points. Total non sense
JIM VETTER
JIM VETTER Dec 03, 2022 8:30AM ET
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would've *
Chavali Kumar
Chavali Kumar Dec 03, 2022 3:20AM ET
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Its not surprisingly. Internet will rising up until second q next year
tim banks
tim banks Dec 02, 2022 2:44PM ET
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damn biden stop creating jobs!
rob finch
rob finch Dec 02, 2022 2:44PM ET
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accepting your premise we should reelect this economic genius.
Brad Albright
Brad Albright Dec 02, 2022 2:44PM ET
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Well, results speak for themselves.
Wrong Franco
Wrong Franco Dec 02, 2022 10:00AM ET
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Overreact by this simple number, it doesn't even mean economy is good.
Stephon Starrantino
Stephon Starrantino Dec 02, 2022 9:37AM ET
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How is it up?? It drop from last month 20 k does anyone know how to interpret data with glass half full anymore ! Uggg
Richie Berg
Richie Berg Dec 02, 2022 9:32AM ET
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Rates can keep going up. Terminal rate >5%. The thought that the coming recession will be transitory, is like the transitory inflation.
Mark Westland
Mark Westland Dec 02, 2022 9:23AM ET
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The economy has changed dramatically in the past few years. Many people are self-employed or gig workers. I know numerous people who fall into this category. Some have slowed down. A couple of my friends who are contractors haven't had any work the past 2 months. These people aren't included. C.C debt going through the roof. Personal savings dropping drastically. Don't let these number fool you. Things are getting bad fast. Wait till February and see if the hiring is still soaring. Plus, see if these jobs are living wage jobs. This is going to get ugly. Mypo
Tre Hsi
Tre Hsi Dec 02, 2022 9:23AM ET
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lakes Tenn  all time low you say?  you may want to check the participation rate in 2020 when most months were below 62%......
Brad Albright
Brad Albright Dec 02, 2022 9:23AM ET
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lakes Tenn "All time low" but not if you adhere to reality.
tim banks
tim banks Dec 02, 2022 9:23AM ET
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job participation above 2018 levels
Rolf Neuer
Rolf Neuer Dec 02, 2022 9:22AM ET
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75bps hike please 🙏
Wrong Franco
Wrong Franco Dec 02, 2022 9:22AM ET
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50 or less
Luke Knoep
Luke Knoep Dec 02, 2022 9:22AM ET
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In the past lots of 75bps hikes have caused a recession in the next year as people get laid off. Fed needs to keep raising rates but by 50bps or less so we can hopefully avoid a recession.
John Healy
John Healy Dec 02, 2022 9:22AM ET
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Wrong Franco Not with that U6 number.
Samer Diab
Samer Diab Dec 02, 2022 9:22AM ET
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recession is 100% coming. maybe end of 2023. the 10 yr 3 months yield curve inverted and it has a 100% track record of inverting before every recession in history
Naharani HS
Naharani HS Dec 02, 2022 9:21AM ET
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The culprit FED eloping hard earned $ of investors
Brad Albright
Brad Albright Dec 02, 2022 9:19AM ET
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A bunch of America haters with fake screen names telling us empirical data is fake. Hilarious how ridiculous they look.
Show previous replies (1)
Brad Albright
Brad Albright Dec 02, 2022 9:19AM ET
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Feel better now?
Brad Albright
Brad Albright Dec 02, 2022 9:19AM ET
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You see who sides with you, Bill?
Bill Powers
Bill Powers Dec 02, 2022 9:19AM ET
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haha that's it? this is your rebuttal. so pathetic 🙄
Tre Hsi
Tre Hsi Dec 02, 2022 9:19AM ET
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now all we need is for the Orange Messiah to come back and tell us again the real unemployment rate is 43%.....now there is a reliable economic data source all MAGA nutjobs can count on.....
Brad Albright
Brad Albright Dec 02, 2022 9:19AM ET
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Bill Powers Okay, here's my rebuttal: It's weird that I am so under your skin you feel it necessary to stalk me in the comments with imaginary accusations. How's that, stalker?
 
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