Things of economists, when the forecast of not so good news, such as the slowdown in job creation, a sign of good collective health, is cultivated with relief among those analysts, even without concealed joy.
But reality is there to deny the wishes and forecasts. The US economy created 263,000 jobs in November, well above forecasts, despite the aggressiveness of the Federal Reserve (Fed) in the fight against inflation and the massive layoffs and job freezes at companies in the technology sector .
All the headlines this Friday morning reflect that the Labor Department report offers much stronger than expected job growth, in more than clear defiance of all expectations. Faced with this situation, the Dow Jones futures dropped more than 400 points and the dollar rose.
It was taken for granted that, due to the impact of the spectacular rise in interest rates by the Fed since March (an increase of 3.75%) in its fight against inflation, this would be palpably expressed as a setback and that “ alone” there would be 200,000 new jobs during November. There was even talk this week that this trend would lead to negative numbers sometime in 2023-
The oracles, once again, have gone badly stopped. The unemployment rate remains at 3.7%, figures comparable to the pre-pandemic level and one of the lowest in half a century.
From this it can be deduced that the labor market continues with its challenge to those who risk a next recession. In addition, in the fight to tame the rise in prices, wages rose 0.6% in November, double what was estimated, a stronger rise than that of October, which stood at 0.4%. The calculation remains at 5.1% annualized, above the forecast of 4.6%.
This set of circumstances puts the eye back on the Fed and its monetary policy reviews. Its president, Jerome Powell, offered signs last Wednesday in a speech that the US central bank would slow the pace of rate hikes at its December meeting. It was deduced that the rise would continue but that it would be 0.5% after four consecutive increases of 0.75%. The unemployment data may imply a revision of that revision.
Analysts have the consolation that this figure is lower than that of October, which goes from the 261,000 that was said a month ago, to 284,000 once revised. And also less than the 269,000 in September, 46,000 less than initially estimated. The labor force has dropped from 62.2% in October to 62.1%.
There are other elements that reinforce the role of the Fed. The US economy has created an average of 392,000 jobs throughout this year, compared to 562,000 in 2021. The housing sector has weakened, but consumption continues to accelerate .
So the jobs boom has continued despite the ultra-aggressive efforts of the Fed. Powell stressed that high wages are "the main story why prices keep going up."
Leisure and hospitality led job gains by adding 88,000 workers. Other relevant sectors were health care (45,000), the 42,000 linked to government tasks or the 23,000 of social assistance, at the rate of February 2020, as well as 20,000 in construction or 14,000 in the manufacturing industry.
