WASHINGTON: US job growth increased by the most in 10 months in November as the healthcare industry boosted hiring and production workers at General Motors returned to work after a strike, the strongest sign yet the economy is in no danger of stalling.
The unemployment rate ticked back down to its lowest level in nearly half a century and wage gains remained near their strongest in a decade, the Labour Department’s closely watched monthly employment report showed on Friday.
The numbers suggest consumers will keep the longest economic expansion in history, now in its 11th year, chugging along into next year when Americans will decide whether to re-elect President Donald Trump.
The report added to other fairly upbeat data on the trade deficit, housing and orders for big-ticket goods. Together, the improving data appear to validate the Federal Reserve’s decision in October to signal no further interest rate cuts are needed for now. The US central bank cut rates three times this year, starting in July when it reduced borrowing costs for the first time since 2008.
US central bank policymakers are expected to highlight the economy’s resilience when they meet on December 10-11, though trade tensions continue to reverberate in the background.
“This was a strong report, with a solid rise in payrolls, another drop in the unemployment rate, and decent growth in hourly earnings,” said Chris Low, chief economist at FHN Financial in New York. “The Fed will see this as clear vindication of their decision to stop cutting rates.” Nonfarm payrolls increased by 266,000 jobs last month, lifted by the gain of 60,200 healthcare workers, the most since March, and increased hiring at restaurants and bars, the government’s survey of establishments showed. Manufacturing recouped all the 43,000 positions lost in October.
But colder-than-normal temperatures in November curbed hiring at construction sites and helped to sink mining payrolls.
The largest increase in payrolls since January pushed job growth well above its monthly average of 180,000 this year. Economists had forecast payrolls rising by 180,000 jobs in November. The economy created 41,000 more jobs in September and October than previously estimated.
Even discounting the roughly 46,000 GM returnees, employment growth exceeded 200,000 jobs last month. The robust payroll gains suggest the Trump administration’s 17-month trade war with China, which has plunged manufacturing into recession, has not yet spilled over to the broader economy.
Some economists said this could buy the Trump administration more time as it negotiates a “phase one” trade deal with China. Top White House economic adviser Larry Kudlow said on Friday the December 15 deadline remained in place for a new round of US tariffs on Chinese goods set to kick in, adding “there’s no arbitrary deadline,” on trade talks.
“The report alleviates pressure on the Trump administration to make a trade deal with China, giving negotiators more leverage to push for a harder line,” said Daniel Zhao, a senior economist at Glassdoor in San Francisco.
The dollar .DXY strengthened against a basket of currencies, snapping a five-day losing streak. US Treasury prices fell. Stocks on Wall Street rallied after a roller-coaster week.
The US-China trade spat has bruised business confidence and undercut capital expenditure, tipping manufacturing into recession.
— Reuters
Oman Observer is now on the WhatsApp channel. Click here
