Sports

The US remains strong in November for hiring

The US job market has defied skeptics and added hundreds of thousands of jobs month after month despite rising numbers.

Despite high inflation and a slow-growing economy, the country’s employers continued to hire briskly in November – a sign of resilience in the face of the Federal Reserve’s aggressive rate hikes.

The economy added 263,000 jobs while the unemployment rate remained at 3.7 percent, still near its 53-year low, the Labor Department said Friday. Job growth in November fell only slightly from October’s 284,000 growth.

Last month’s hirings were a substantial increase. While inflation has risen throughout the year and the Fed has imposed ever higher interest rates, the US job market has defied skeptics and added hundreds of thousands of jobs month after month.

Strong hiring growth in November will raise concerns that the Fed will now have to keep rates high even longer than many had assumed. The reaction on Wall Street was immediate, with Dow Jones Industrial Average futures plummeting nearly 400 points.

As employers continued to hire, pay increases followed. In November, median hourly wages rose 5.1 percent from a year ago, a sharp increase that could complicate the Fed’s efforts to curb inflation. In a speech this week, Fed Chairman Jerome Powell stressed that jobs and wages were growing too fast for the central bank to put a brake on inflation quickly. The Fed has raised its benchmark interest rate, from near zero in March to nearly 4 percent, to try to push inflation back towards its annual target of 2 percent.

In the meantime, steady hiring and rising wages have helped US households boost the economy. In October, consumer spending grew at a healthy pace, even after adjusting for inflation. Americans bought more cars, restaurant meals and other services.

After contracting in the first six months of the year, the US economy grew at a solid 2.9 percent annualized last quarter. In addition to the strength of consumer spending, a spike in exports contributed to growth.

While steady hiring and rising wages have increased spending, Americans are also increasingly turning to credit cards to keep up with higher prices. Many are also digging into savings, a trend that cannot go on indefinitely.

Some signs of weakness have raised concerns about a likely recession next year, in part because many fear the Fed’s hefty rate hikes will eventually derail the economy. Particularly in the technology, media and retail sectors, an increasing number of companies have made high-profile layoff announcements.

In addition to job cuts by tech giants like Amazon, Meta and Twitter, smaller companies — including DoorDash, real estate company Redfin and retailers Best Buy and the Gap — have said they will lay off workers.

And in November, one measure of factory activity fell to a level that suggested the manufacturing sector is shrinking for the first time since May 2020.

Show More

Merry

Merry C. Vega is a highly respected and accomplished news author. She began her career as a journalist, covering local news for a small-town newspaper. She quickly gained a reputation for her thorough reporting and ability to uncover the truth.

Related Articles

Back to top button