The United States added 266,000 jobs in November and the official unemployment rate fell to 3.5%. The results were buoyed by the return to jobs of 41,300 General Motors workers after the settlement of that strike. But the November total was still impressively stronger than expected. Economists were projecting that the economy should add 180,000 jobs in the month. At 3.5% the official unemployment rate returned to a 50-year low. The U6 full unemployment, which includes discouraged workers and workers in parttime jobs who would like to find full-time work, dropped to 6.9% from 7.0% in October. The U6 unemployment rate is just about unchanged from the 7.2% of November 2018. (The U6 numbers are not seasonally adjusted.)
The U.S. economy has added an average of 205,000 jobs per month from September through November. (The U.S. economy adds about 125,000 new workers every month.)
The big puzzle in the jobs numbers continues to be why wage growth hasn’t picked up more. Over the past 12 months as of November, average hourly earnings have risen by 3.1%. That’s up from the 3% 12-month growth rate in October.
But the 12-month rate of wage growth peaked at 3.4% in February and has slipped since then. That’s helped keep inflation below the Federal Reserve’s at/or below 2% target–moving the Fed to the sidelines on any interest rate moves–but also troubling economists on and off Wall Street who worry that without higher wage growth the current consumer-driven economy will falter.
Wall Street certainly cheered the results. The standard & Poor’s 500 closed up 0.91% and the Dow Jones Industrial Average ended the day up 1.22%. the NASDAAQ Composite scored an even 1.00% gain and the Russell 2000 small cap index closed 1.19% higher. The iShares MSCI Emerging Markets ETF (EEM) gained 0.58% on the day.
