There are strong headline numbers for the United States monthly job report. And then there are blowouts.
Friday’s report is most decisively the latter.
The US economy added a whopping 266,000 jobs in November, blowing away most analysts’ expectations. The backward-looking picture also got brighter with job creation figures for September and October having been revised upward by a combined 41,000 jobs.
November’s stellar performance and the revisions pulled average monthly job growth in 2019 up to 180,000 – more than enough to absorb the estimated 100,000 new people who enter the US labour force each month.
Some of November’s spectacular gains were the result of General Motors employees returning to work following a strike in October, which helped manufacturing employment rise by 54,000 jobs in November. Some 41,000 of those positions reflected gains in employment in the motor vehicles and parts industry.
Strong gains also occurred in healthcare as well as professional and technical services, which increased by 45,000 jobs and 31,000 jobs, respectively.
Mining jobs – which includes the shale oil sector – bucked the positive trending, shedding 7,000 jobs in November. Mining employment is down by 19,000 jobs since May.
The unemployment rate for November held near a 50-year low at 3.5 percent, slightly lower than the month before. But the number of Americans either working or actively looking for a job – known as the “labour force participation rate” – also ticked down slightly to 63.2 percent.
And Americans got a bit more of a raise than expected, with average hourly wages growing 3.1 percent from a year earlier.
Though the US-China trade war, particularly its impact on global growth, is an overarching source of concern, the healthy American labour force picture continues to underpin a US economic expansion that is now its 11th year.
November’s US jobs gains also lend credence to recent moves by the US central bank, the Federal Reserve.
Last month, the Fed lowered interest rates for the third time this year, but signalled it is pressing pause on its current cycle of lowering borrowing costs. Interest rate cuts stimulate economic growth but can also stoke inflation, and the Fed has a dual mandate to promote maximum employment and keep inflation in check.
The Federal Reserve has been a favourite punching bag of US President Donald Trump, who has taken to Twitter to pressure the Fed to cut rates deeply to boost US exports. Trump has rolled out a slew of insults to drive the point home. In September, he accused Federal Reserve Chairman Jerome Powell of being naive, and called Fed policymakers “boneheads”.