November Jobs Report U.S. Hiring Continues at Robust Pace, Complicating Fed’s Path
Raw Text
Live Updated Dec. 2, 2022, 9:00 a.m. ET Dec. 2, 2022, 9:00 a.m. ET
Live
Updated Dec. 2, 2022, 9:00 a.m. ET Dec. 2, 2022, 9:00 a.m. ET
Updated
Dec. 2, 2022, 9:00 a.m. ET
Dec. 2, 2022, 9:00 a.m. ET
U.S. Hiring Continues at Robust Pace, Complicating Fed’s Path
Give this article Give this article Give this article
Give this article Give this article Give this article
Give this article
Give this article
Give this article
Here’s what we know:
The labor market showed resilience despite efforts by the Federal Reserve to cool the economy, stoking fears about higher inflation.
U.S. employers added 263,000 jobs in November, the latest sign of the economy’s strength.
U.S. employers added 263,000 jobs in November, the latest sign of the economy’s strength.
U.S. employers added 263,000 jobs in November, the latest sign of the economy’s strength.
Robust hiring belies Fed’s hope for job market cool-down.
Robust hiring belies Fed’s hope for job market cool-down.
Robust hiring belies Fed’s hope for job market cool-down.
Markets sink after a surprisingly strong report.
Markets sink after a surprisingly strong report.
Markets sink after a surprisingly strong report.
U.S. employers added 263,000 jobs in November, the latest sign of the economy’s strength.
Monthly change in jobs
+263,000
in November
+600,000 jobs
+400,000
+200,000
Nov.
’21
Feb.
’22
May
Aug.
Nov.
+600,000 jobs
+263,000
in November
+400,000
+200,000
Nov. ’21
Feb. ’22
May
Aug.
Nov.
Data is seasonally adjusted.
Source: Bureau of Labor Statistics
America’s jobs engine kept churning in November, the Labor Department reported Friday, a show of continued demand for workers despite the Federal Reserve’s push to curb inflation by tamping down hiring.
Employers created 263,000 jobs, even as a wave of layoffs in the tech industry made headlines. The unemployment rate was steady at 3.7 percent.
The labor market has been surprisingly resilient in the face of successive interest rate increases by the Fed over the past year. Even sectors normally sensitive to borrowing costs, like construction and manufacturing, have been slow to back off the brisk pace of growth they posted coming out of the pandemic.
Businesses, while treading cautiously, have generally still found reason to expand.
“It feels to me like we’re not in a decline, just in a consolidation, kind of a flattening,” said Jon Guidi, the chief executive of HealthCare Recruiters International. “I don’t get a strong negative indication on anything. It’s ‘Hey, Jon, we still need to hire, but maybe not in as much of a rush as we were a few months ago. Maybe we’ll be a little pickier.’”
Mr. Guidi’s industry, health care, has seen some of the highest job-opening rates in the economy as employers seek to win back workers who bore the brunt of dealing with Covid-19. More broadly, job postings and the share of workers quitting their jobs have been declining from record highs earlier in the year, while initial claims for unemployment insurance have remained low .
Transportation and warehousing is one sector where hiring has stalled, as pandemic-era shopping binges have given way to more spending on travel and leisure. Some independent truck drivers have left for other occupations, said Bob Costello, chief economist of the American Trucking Associations, but the overall number of jobs has remained significantly above its 2019 baseline.
“If you’re a good driver, you don’t have a slew of accidents on your record and you can pass a drug test, there’s no reason for you to be unemployed unless you want to be,” Mr. Costello said. “Zero.”
Other indicators have signaled that a more serious contraction is underway. The purchasing managers’ index for manufacturing, which measures how many manufacturers are expanding, turned negative for the first time since the pandemic. And the outplacement firm Challenger, Gray & Christmas measured a quadrupling of layoffs last month from a year earlier, led by 53,000 pink slips at technology companies, the highest Challenger has measured since beginning to collect the data in 2000.
Those recent high-profile cuts may not spread throughout the rest of the economy. But they are likely to cause pain in some regions that depend on those highly paid positions, like San Francisco.
“I think it’s a little premature to see downturns in other industries; tourism is still doing OK,” said Ted Egan, the chief economist for the City of San Francisco, noting that two-thirds of the city’s growth since 2010 has come directly or indirectly from tech. “But I think eventually we will see tech drag down the local economy.”
— Lydia DePillis
—
Lydia DePillis
Robust hiring belies Fed’s hope for job market cool-down.
Federal Reserve officials are keenly focused on the health of hiring and wages as they try to figure out what might come next for inflation and monetary policy. On Friday, they received further evidence that a meaningful job market slowdown remains elusive.
Central bankers care about the labor market because it could be a key factor in determining how much and how quickly inflation will fade. While other sources of inflation — including supply chain issues and rapidly rising rents — appear poised to dissipate in 2023, an imbalance between job openings and available workers persists.
That could keep wages rising as companies compete for a limited supply of workers, which could in turn push prices up in labor-intensive service industries as companies try to cover their climbing payroll bills. Jerome H. Powell, the Fed chair, highlighted service industry inflation and its links to the labor market in a closely watched speech earlier this week.
“This may be the most important category for understanding the future evolution of core inflation,” Mr. Powell said of the set of services that covers things including health care, haircuts and hospitality. “Because wages make up the largest cost in delivering these services, the labor market holds the key to understanding inflation in this category.”
Friday’s jobs report suggested that hiring in service industries remained solid , and that wages continued to climb at a rapid pace: jumping by 5.1 percent over the past year, far more than economists expected. Wages in service industries picked up by 5.3 percent on an annual basis, much more than the 2.5 percent that was common in the decade leading up to the pandemic.
Job gains also remained solid, with employment climbing by 263,000 in November, much faster than the level that the Fed thinks is necessary to keep the economy steady.
“Job growth remains far in excess of the pace needed to accommodate population growth over time — about 100,000 per month by many estimates,” Mr. Powell said this week, noting that the labor market “shows only tentative signs of rebalancing.”
— Jeanna Smialek
—
Jeanna Smialek
Understand Inflation and How It Affects You
Social Security: The cost-of-living adjustment, which helps the benefit keep pace with inflation, will be 8.7 percent next year. Here is what that means .
Social Security: The cost-of-living adjustment, which helps the benefit keep pace with inflation, will be 8.7 percent next year. Here is what that means .
Budget Surpluses: Up to 20 states are using their excess funds to help taxpayers deal with rising costs. But some economists worry that the payments could fuel inflation .
Budget Surpluses: Up to 20 states are using their excess funds to help taxpayers deal with rising costs. But some economists worry that the payments could fuel inflation .
Tax Rates: The I.R.S. has made inflation adjustments for 2023, which could push many people into a lower tax bracket and reduce tax bills .
Tax Rates: The I.R.S. has made inflation adjustments for 2023, which could push many people into a lower tax bracket and reduce tax bills .
Your Paycheck: Inflation is taking a bigger and bigger bite out of your wallet. Now, it’s going to affect the size of your paycheck next year .
Your Paycheck: Inflation is taking a bigger and bigger bite out of your wallet. Now, it’s going to affect the size of your paycheck next year .
Advertisement
Markets sink after a surprisingly strong report.
Stocks fell on Friday after the release of U.S. employment data for November showed more jobs were added than economists expected, a report that is critical to Wall Street’s understanding of how far the Federal Reserve has left to go as it looks to bring down inflation.
Futures for the S&P 500 index fell 1.6 percent in early trading, after ending the previous day flat. But the benchmark index has been climbing steadily in recent weeks, recovering from a staggering loss earlier this year, as investors anticipate a slowdown in the Fed’s campaign to raise interest rates. The S&P 500 gained more than 5 percent in November and about 8 percent in October, the first back-to-back monthly gains since mid-2021.
This changing view has also turned up in the government bond market, where yields have fallen sharply in recent weeks. The U.S. two-year Treasury note, which is tied to expectations around the Fed’s interest rate movements, jumped up on Friday to 4.3 percent and the 10-year note rose to 3.6 percent.
As it tries to gauge what might come next, Wall Street is closely monitoring economic data and central bankers’ public statements. While some data, like October’s Consumer Price Index report , have suggested the Fed has made progress in taming inflation, the labor market remains robust.
The economy added 263,000 jobs in November compared to economists’ expectations of 200,000, showing the labor market is still robust.
On Wednesday, the latest Job Openings and Labor Turnover Survey showed that job openings remained high in October, even as the number of open positions fell during the month. Critically, the number of layoffs during the month was unchanged.
Addressing the labor market at an event on Wednesday, Jerome H. Powell, the Fed chair , said there were “only tentative signs” that the labor market was moderating and wage growth remained rapid, which posed challenges for the Fed, which is trying to cool the economy to bring stubbornly high inflation under control “Despite some promising developments, we have a long way to go in restoring price stability,” Mr. Powell said.
Mr. Powell also said a slowdown in the pace of the Fed’s interest rate increases might be possible as early as its meeting this month, which caused markets to shoot up.
— Isabella Simonetti
—
Isabella Simonetti
Single Line Text
Live Updated Dec. 2, 2022, 9:00 a.m. ET Dec. 2, 2022, 9:00 a.m. ET. Live. Updated Dec. 2, 2022, 9:00 a.m. ET Dec. 2, 2022, 9:00 a.m. ET. Updated. Dec. 2, 2022, 9:00 a.m. ET. Dec. 2, 2022, 9:00 a.m. ET. U.S. Hiring Continues at Robust Pace, Complicating Fed’s Path. Give this article Give this article Give this article. Give this article Give this article Give this article. Give this article. Give this article. Give this article. Here’s what we know: The labor market showed resilience despite efforts by the Federal Reserve to cool the economy, stoking fears about higher inflation. U.S. employers added 263,000 jobs in November, the latest sign of the economy’s strength. U.S. employers added 263,000 jobs in November, the latest sign of the economy’s strength. U.S. employers added 263,000 jobs in November, the latest sign of the economy’s strength. Robust hiring belies Fed’s hope for job market cool-down. Robust hiring belies Fed’s hope for job market cool-down. Robust hiring belies Fed’s hope for job market cool-down. Markets sink after a surprisingly strong report. Markets sink after a surprisingly strong report. Markets sink after a surprisingly strong report. U.S. employers added 263,000 jobs in November, the latest sign of the economy’s strength. Monthly change in jobs. +263,000. in November. +600,000 jobs. +400,000. +200,000. Nov. ’21. Feb. ’22. May. Aug. Nov. +600,000 jobs. +263,000. in November. +400,000. +200,000. Nov. ’21. Feb. ’22. May. Aug. Nov. Data is seasonally adjusted. Source: Bureau of Labor Statistics. America’s jobs engine kept churning in November, the Labor Department reported Friday, a show of continued demand for workers despite the Federal Reserve’s push to curb inflation by tamping down hiring. Employers created 263,000 jobs, even as a wave of layoffs in the tech industry made headlines. The unemployment rate was steady at 3.7 percent. The labor market has been surprisingly resilient in the face of successive interest rate increases by the Fed over the past year. Even sectors normally sensitive to borrowing costs, like construction and manufacturing, have been slow to back off the brisk pace of growth they posted coming out of the pandemic. Businesses, while treading cautiously, have generally still found reason to expand. “It feels to me like we’re not in a decline, just in a consolidation, kind of a flattening,” said Jon Guidi, the chief executive of HealthCare Recruiters International. “I don’t get a strong negative indication on anything. It’s ‘Hey, Jon, we still need to hire, but maybe not in as much of a rush as we were a few months ago. Maybe we’ll be a little pickier.’” Mr. Guidi’s industry, health care, has seen some of the highest job-opening rates in the economy as employers seek to win back workers who bore the brunt of dealing with Covid-19. More broadly, job postings and the share of workers quitting their jobs have been declining from record highs earlier in the year, while initial claims for unemployment insurance have remained low . Transportation and warehousing is one sector where hiring has stalled, as pandemic-era shopping binges have given way to more spending on travel and leisure. Some independent truck drivers have left for other occupations, said Bob Costello, chief economist of the American Trucking Associations, but the overall number of jobs has remained significantly above its 2019 baseline. “If you’re a good driver, you don’t have a slew of accidents on your record and you can pass a drug test, there’s no reason for you to be unemployed unless you want to be,” Mr. Costello said. “Zero.” Other indicators have signaled that a more serious contraction is underway. The purchasing managers’ index for manufacturing, which measures how many manufacturers are expanding, turned negative for the first time since the pandemic. And the outplacement firm Challenger, Gray & Christmas measured a quadrupling of layoffs last month from a year earlier, led by 53,000 pink slips at technology companies, the highest Challenger has measured since beginning to collect the data in 2000. Those recent high-profile cuts may not spread throughout the rest of the economy. But they are likely to cause pain in some regions that depend on those highly paid positions, like San Francisco. “I think it’s a little premature to see downturns in other industries; tourism is still doing OK,” said Ted Egan, the chief economist for the City of San Francisco, noting that two-thirds of the city’s growth since 2010 has come directly or indirectly from tech. “But I think eventually we will see tech drag down the local economy.” — Lydia DePillis. — Lydia DePillis. Robust hiring belies Fed’s hope for job market cool-down. Federal Reserve officials are keenly focused on the health of hiring and wages as they try to figure out what might come next for inflation and monetary policy. On Friday, they received further evidence that a meaningful job market slowdown remains elusive. Central bankers care about the labor market because it could be a key factor in determining how much and how quickly inflation will fade. While other sources of inflation — including supply chain issues and rapidly rising rents — appear poised to dissipate in 2023, an imbalance between job openings and available workers persists. That could keep wages rising as companies compete for a limited supply of workers, which could in turn push prices up in labor-intensive service industries as companies try to cover their climbing payroll bills. Jerome H. Powell, the Fed chair, highlighted service industry inflation and its links to the labor market in a closely watched speech earlier this week. “This may be the most important category for understanding the future evolution of core inflation,” Mr. Powell said of the set of services that covers things including health care, haircuts and hospitality. “Because wages make up the largest cost in delivering these services, the labor market holds the key to understanding inflation in this category.” Friday’s jobs report suggested that hiring in service industries remained solid , and that wages continued to climb at a rapid pace: jumping by 5.1 percent over the past year, far more than economists expected. Wages in service industries picked up by 5.3 percent on an annual basis, much more than the 2.5 percent that was common in the decade leading up to the pandemic. Job gains also remained solid, with employment climbing by 263,000 in November, much faster than the level that the Fed thinks is necessary to keep the economy steady. “Job growth remains far in excess of the pace needed to accommodate population growth over time — about 100,000 per month by many estimates,” Mr. Powell said this week, noting that the labor market “shows only tentative signs of rebalancing.” — Jeanna Smialek. — Jeanna Smialek. Understand Inflation and How It Affects You. Social Security: The cost-of-living adjustment, which helps the benefit keep pace with inflation, will be 8.7 percent next year. Here is what that means . Social Security: The cost-of-living adjustment, which helps the benefit keep pace with inflation, will be 8.7 percent next year. Here is what that means . Budget Surpluses: Up to 20 states are using their excess funds to help taxpayers deal with rising costs. But some economists worry that the payments could fuel inflation . Budget Surpluses: Up to 20 states are using their excess funds to help taxpayers deal with rising costs. But some economists worry that the payments could fuel inflation . Tax Rates: The I.R.S. has made inflation adjustments for 2023, which could push many people into a lower tax bracket and reduce tax bills . Tax Rates: The I.R.S. has made inflation adjustments for 2023, which could push many people into a lower tax bracket and reduce tax bills . Your Paycheck: Inflation is taking a bigger and bigger bite out of your wallet. Now, it’s going to affect the size of your paycheck next year . Your Paycheck: Inflation is taking a bigger and bigger bite out of your wallet. Now, it’s going to affect the size of your paycheck next year . Advertisement. Markets sink after a surprisingly strong report. Stocks fell on Friday after the release of U.S. employment data for November showed more jobs were added than economists expected, a report that is critical to Wall Street’s understanding of how far the Federal Reserve has left to go as it looks to bring down inflation. Futures for the S&P 500 index fell 1.6 percent in early trading, after ending the previous day flat. But the benchmark index has been climbing steadily in recent weeks, recovering from a staggering loss earlier this year, as investors anticipate a slowdown in the Fed’s campaign to raise interest rates. The S&P 500 gained more than 5 percent in November and about 8 percent in October, the first back-to-back monthly gains since mid-2021. This changing view has also turned up in the government bond market, where yields have fallen sharply in recent weeks. The U.S. two-year Treasury note, which is tied to expectations around the Fed’s interest rate movements, jumped up on Friday to 4.3 percent and the 10-year note rose to 3.6 percent. As it tries to gauge what might come next, Wall Street is closely monitoring economic data and central bankers’ public statements. While some data, like October’s Consumer Price Index report , have suggested the Fed has made progress in taming inflation, the labor market remains robust. The economy added 263,000 jobs in November compared to economists’ expectations of 200,000, showing the labor market is still robust. On Wednesday, the latest Job Openings and Labor Turnover Survey showed that job openings remained high in October, even as the number of open positions fell during the month. Critically, the number of layoffs during the month was unchanged. Addressing the labor market at an event on Wednesday, Jerome H. Powell, the Fed chair , said there were “only tentative signs” that the labor market was moderating and wage growth remained rapid, which posed challenges for the Fed, which is trying to cool the economy to bring stubbornly high inflation under control “Despite some promising developments, we have a long way to go in restoring price stability,” Mr. Powell said. Mr. Powell also said a slowdown in the pace of the Fed’s interest rate increases might be possible as early as its meeting this month, which caused markets to shoot up. — Isabella Simonetti. — Isabella Simonetti.