The U.S. economy added a bigger-than-expected total of new hiring last month with upward revisions to September and October numbers suggesting solid labor market momentum toward the end of the year.
The Bureau of Labor Statistics said 227,000 new jobs were created last month, a figure that topped Wall Street's forecast of 202,000 and was well above the upwardly revised reading of 36,000 in October, which was hit hard. by a strike at aircraft manufacturer Boeing BA and two major hurricanes in the southeast.
Average hourly earnings in November rose 0.4% from the previous month's levels and rose 4% annually, the BLS said, with both figures exceeding Wall Street forecasts.
However, the overall unemployment rate rose to 4.2%, while the labor force participation rate fell modestly to 62.5%.
“This month's stronger-than-expected jobs report can be attributed in part to the boost from seasonal positions in preparations for an influx of holiday shopping,” said Steve Rick, chief economist at TruStage.
“After last month's disappointing report, this push was much needed in the wake of nationwide strikes and a catastrophic hurricane season,” he added. “This recovery is a key indicator that while the market was heavily impacted by external forces in October, they left no long-term damage to the market as unemployment remains below its natural rate of 4.5 %”.
US stock futures reversed earlier declines following the data's release, with the S&P 500 now trading 7 points higher and the Nasdaq pricing in a 25-point gain and the Dow an 85-point gain.
Benchmark 10-year Treasury yields fell 3 basis points to 4.159% following the data release, while rate-sensitive 2-year bonds fell 6 basis points to 4.112%.
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CME Group's FedWatch now suggests a 90% chance of a quarter-point rate cut later this month in Washington, up from 68% before the data was released, with a follow-up move likely in January now trading at 27.1%.
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“This data clears the way for the Federal Reserve to cut the policy rate further in December; nothing in this employment data supports a pause in normalization,” said Jamie Cos, managing partner at Harris Financial Group.
“The labor market has stabilized and remains stronger than all the naysayers have led us to believe. A stable labor market supports a strong consumer-based economy, and that is exactly what the data has shown all year” , he added.
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