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November jobs report gives ‘mixed messages’
New data from the Bureau of Labor Statistics revealed 199,000 jobs were added in November. Gains in October remained the same and September was revised down 35,000. NAFCU Chief Economist and Vice President of Research Curt Long provided insights in a new Macro Data Flash report.
“The November jobs report was one with mixed messages,” said Long. “The household survey was stronger than the establishment survey, resulting in the first drop in the unemployment rate since July. This will ease concerns connected with the Sahm rule, which makes historical connections between increases in the unemployment rate and the onset of recessions. The rise in unemployment over the prior three months placed the labor market on the threshold of the Sahm rule's triggering threshold, but the drop in November provides greater cushion.
“The establishment survey showed more modest job gains, particularly given that roughly 15 percent of monthly job gains were due to the return of striking UAW workers,” continued Long. “Wage growth accelerated for the first time since June, and average hours worked also ticked up. That should bode well for disposable income growth, but could also get people thinking about the reappearance of price pressures.”
The unemployment rate dropped to 3.7 percent in November and the labor force participation rose slightly to 62.8 percent. Year-over-year wage growth held at 4 percent, which is the lowest level since June 2021.
“With markets eyeing rate cuts in the first quarter of 2024, this report suggests that the labor market is still on solid footing, allowing the Fed to remain patient. NAFCU still anticipates the first rate cut in the second quarter,” Long concluded.
Results among private sector industries were mixed. Gains were concentrated in education and health (+99,000), government (+49,000), and leisure and hospitality (+40,000). Retail lost 38,000 jobs.
For more up-to-date economic insights from NAFCU's award-winning research team, view NAFCU’s Macro Data Flash reports.