US Economy Gains Momentum As Job Creation Explodes

The Labor Department has revealed the addition of over 227,000 jobs in November, exceeding economists’ expectations of 155,000 to 275,000 jobs. The figure marks a 630 percent increase from the revised October total of 36,000 jobs, which was initially reported as just 12,000. Brandywine Global portfolio manager Jack McIntyre stated, “Employment reports are always important to both the markets and the Fed but in the hierarchy of economic data there has been a shift. Next week’s inflation report will be more impactful as inflation is back to being the critical variable.”

Healthcare contributed 53,600 jobs, consistent with its average monthly gain of 59,000 over the past year. Key contributors included ambulatory healthcare services (22,400 jobs) and home healthcare (16,000 jobs).

Cherry Lane Investments partner Rick Meckler said, “The report was pretty strong. The report does show the incredible resiliency of the U.S. economy but, then again, you’re at a point where we were already beginning to lower rates and easing some of the pressure higher short-term rates had on markets.”

Meckler added, “The conclusion of the election took away some of the uncertainty that may have led businesses to think about adding employees or making plans for 2025. One big factor, though, will be is the government serious about a drastic reduction of federal jobs for cost-saving purposes, and what impact that will have on future job reports.”

Leisure and hospitality added 53,000 jobs, with 28,900 in food services and drinking establishments. Government employment rose by 33,000 jobs, primarily at the state level.

Managing Partner, Harris Financial Group, Richmond Virginia Jamie Cox said, “These data clear the path for the Federal Reserve to further reduce the policy rate in December–nothing in these jobs data supports a pause in normalization.”

Chief Market Economist, Spartan Capital Securities, New York Peter Cardillo stated, “Job creation was in basically in line with market expectations, the (October) revisions of up 36,000 probably due to weather related situations. Wages were a little bit higher than we were looking for, but on a year to year it basically held steady.”

Average hourly earnings for non-farm private employees increased by 13 cents, or 0.4 percent, indicating a slight rise in income alongside job gains. The job report has sparked discussions about a potential Federal Reserve rate cut, expected to be 25 basis points.

Ellen Zentner, Chief Economic Strategist at Morgan Stanley Wealth Management, said, “The economy continues to produce a healthy amount of job and income gains, but a further increase in the unemployment rate tempers some of the shine in the labor market and gives the Fed what it needs to cut rates in December.”

TD Securities Economist Oscar Munoz stated, “We do not think that a surge in November job gains implies a sudden resurgence in hiring, but only the normalization from temporary shocks in the data.”

Stephen Stanley, Chief U.S. Economist at Santander U.S. Capital Markets, stated that the labor market is cooling but remains healthy. Stanley said, “Given all of the noise in the labor market data over the past few months, Fed officials are not likely to view the last two months’ readings at face value.”