Agreements to end historic strikes against the Big Three of the United States motor industry and the end of conflicts with Hollywood screenwriters and actors boosted employment in the world's largest economy in November. The number of nonfarm jobs increased by 199,000 people, according to data released Friday by the Bureau of Labor Statistics, bringing the country's nearly three years of strong labor market dynamism. The unemployment rate, which is measured by a household survey, fell to 3.7%.
The pace of job creation has been cooling in the second half of the year. November's figures are somewhat distorted by the end of the strikes, but without that effect they ratify the idea that the labour market has lost some strength while remaining robust. Job growth in November is lower than the average increase of 240,000 per month over the previous 12 months, but is in line with job growth in recent months. The end of the motor strike brought about 30,000 jobs in the month.
The figures are consistent with the soft landing that the Federal Reserve is seeking for the U.S. economy, that is, a weakening of demand that allows inflation to be contained without falling into a full-blown recession. Unemployment has been below 22% for 4 months, the best run in more than 60 years. September's job creation figure has been revised downwards by 35,000 people, to 262,000, while October's remains at 150,000, although in that last month weighed down by the loss of 32,000 jobs due to the motor strike.
In November, the sectors that pulled the most from employment were health (77,000 people) and public administration (49,000), followed by industry (28,000), although in this case after the return of striking workers. The film and sound recording industries created 17,000 jobs, mainly through the resolution of strikes and labour disputes in the sector. Employment in retail fell by 38,000 people, half in department stores.
For this reason, the data will allow the Federal Reserve to maintain interest rates at the last meeting of the year, scheduled for Tuesday and Wednesday of next week. Although the members of the central bank's monetary policy committee were still expecting an additional 0.25 percentage point rate hike in September, they have finally been discarding that idea and the market is counting on the price of money having peaked for the remainder of the year and perhaps for the entire bull cycle.
The fall in inflation itself pushes up real interest rates, so the market is starting to bet more on when the first cut will come than on further hikes, despite warnings from Jerome Powell, chairman of the Federal Reserve. The apparent strength of November's jobs data has led fewer investors to bet on a first rate cut in March.
In November, the average hourly wage for nonfarm private sector wage earners rose 12 cents, or 0.4%, to $34.10. Over the past 12 months, the average hourly wage has increased by 4%, down from 4.1% in the previous month. That cooling is another good sign in the battle against inflation, but the pace of growth still seems higher than justified by productivity gains.
Labour market conditions appear to be normalising and reaching a somewhat better balance between supply and demand following post-pandemic rigidities. The difficulties that some companies have had in finding workers also mean that they are now thinking more about dispensing with employees in the face of weakening demand.
[Breaking news. Enlargement to come.]
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