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Politics & Money

Stronger than expected job growth raises specter of more Fed hikes

Unemployment remained at 3.7%

Defying economists’ expectations, job growth remained strong in November. Total nonfarm payroll employment rose by 263,000 jobs from October, according to data released Friday by the Bureau of Labor Statistics.

So far this year, monthly job growth has averaged 392,000, down from an average of 562,000 per month in 2021.

Even as the number of jobs continued to rise in November, unemployment remained unchanged from a month prior, holding steady at 3.7%, with 6.0 million persons unemployed.

“With one month to go before the year’s end, labor markets remain in a solid position,” George Ratiu, Realtor.com’s senior economist, said in a statement. “This week’s separate report on job openings highlighted that there were 10.3 million open positions in October, offering about 1.7 openings for each unemployed worker. Meanwhile, 4 million people quit their jobs during the month, looking for better employment.”

Employment in the construction industry was up by 20,000 jobs from October, thanks to large gains in nonresidential building (up 8,200 jobs) and residential specialty trade contractors (up 6,500 jobs). Residential building lost 2,600 jobs from the month prior. According to the report, construction has added an average of 19,000 jobs per month thus far this year, little different from the 2021 average of 16,000 per month.

After loosing 8,700 jobs in October, the real estate and rental and leasing industries gained 13,000 jobs in November, with real estate adding 6,600 jobs and renal and leasing services gaining 6,500 jobs.


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In February 2020, a combined 300,000 were employed in “real estate credit” and as mortgage and nonmortgage loan brokers. As of October, there were roughly 385,700 people in those jobs, suggesting that the industry still has a large number of cuts to make in the coming months as the housing market slows further.

The lion’s share of the job growth in November came from gains in the leisure and hospitality sector (up 88,000 jobs), the health care sector (up 45,000 jobs), and the government sector (up 42,000 jobs).

Also worth noting as we enter the holiday season, employment in retail trade (down 30,000 jobs), and transportation and warehousing (down 15,000 jobs) decreased in November.

While the Federal Reserve announced earlier this week that it may consider slowing interest rate growth, it may reconsider after November’s jobs numbers.

“As Federal Reserve officials prepare to meet in December, labor market tightness will be one of the indicators to consider when deciding the pace of future interest rate hikes,” Odeta Kushi, First American’s deputy chief economist, said in a statement.

“The latest JOLTS report suggests that the labor market supply-demand imbalance may be easing, albeit slowly. Job openings declined from a peak of 11.9 million in March 2022 to 10.3 million in October, remaining above 10 million for the 16th consecutive month.

“Today’s jobs report shows: labor supply recovery as measured by the labor force participation rate has stalled, and even slightly reversed, while wage growth remains strong,” Kushi continued. “The Fed is hoping that slowing wage growth will make its job a little easier, but this report is discouraging.”

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