Hiring in the United States likely rebounded last month from a dismal October, when hurricanes and strikes reduced job growth to its lowest level in nearly four years.
Friday's jobs report from the Labor Department is expected to show that employers added roughly 208,000 jobs in November, according to a survey of forecasters by the data firm FactSet. That would mark a sharp bounce-back from October’s gain of just 12,000 jobs, the fewest in any month since December 2020.
The job market has cooled from the dizzying heights of 2021-2023, when the economy was delivering a robust recovery from the pandemic recession of 2020 and many employers were hiring aggressively. Still, October’s slump was exaggerated by the temporary effects of Hurricanes Helene and Milton and by strikes at Boeing and elsewhere.
Nancy Vanden Houten, lead U.S. economist at Oxford Economics, has estimated that the hurricanes reduced hiring in October by 75,000 but that by November, 60,000 of those workers were back on payrolls. Likewise, the end of strikes at Boeing and Textron Aviation is thought to have increased payrolls last month by up to 38,000 jobs.
Overall, Vanden Houten wrote in a commentary, the November jobs report will probably show that hiring remains “relatively strong.’’
The unemployment rate is thought to have remained at a low 4.1% in November, a sign that Americans as a whole are enjoying unusual job security. This week, the government reported that layoffs fell to just 1.6 million in October, below the lowest levels in the two decades that preceded the pandemic. At the same time, the number of job openings rebounded from a 3 1/2 year low, a sign that businesses are still seeking workers even though hiring has cooled.
The American economy, the world’s largest, has demonstrated its resilience under the continued pressure of high interest rates. To fight the worst bout of inflation in four decades, the Federal Reserve raised its benchmark interest rate 11 times in 2022 and 2023. The much higher borrowing costs for consumers and businesses that resulted were expected to tip the economy into a recession. Instead, it kept growing as consumers continued to spend and employers continued to hire.
The economy grew at a 2.8% annual pace from July through September on healthy spending by consumers. Annual economic growth has topped a decent 2% in eight of the past nine quarters. And inflation has dropped from a 9.1% peak in June 2022 to 2.6% last month. Even so, Americans were deeply frustrated by still-high prices under the Biden-Harris administration, and partly for that reason chose last month to return Donald Trump to the White House.
As the job market has slowed this year, employers have added an average of 170,000 jobs a month. That is a solid figure, though down significantly from an average of 251,000 last year, 377,000 in 2022 and a record 604,000 in 2021, when the economy was roaring out of the COVID recession.
Diane Swonk, chief economist at the tax and consulting firm KPMG, cautions that the job market “could be weaker than it appears.’’ So far this year, the Labor Department has revised down its initial estimate of job growth for each of seven months, Oxford’s Vanden Houten noted.
And while comparatively few Americans are losing jobs, those who do are finding it harder to land a new one: The average unemployed American in October had been out of work for 22.9 weeks, the longest such stretch in 2 1/2 years.
The progress against inflation and the slowdown in hiring, which eases pressure on companies to raise wages and prices, led the Fed to cut its key rate in September and again last month. Another rate cut is expected to be announced when the Fed meets Dec. 17-18.
Forecasters have estimated that average hourly wages rose 3.9% last month from a year earlier. Vanden Houten said she thinks year-over-year wage gains of 3.5% to 4% are consistent with the Fed’s 2% inflation target.
