US unemployment ticks down as the job market remains robust

Monitoring Desk

NEW YORK: The United States saw its jobless rate dip in November while hiring rose more than expected, government data showed Friday, fueling optimism that the world’s biggest economy may achieve the elusive goal of avoiding recession, while also taming inflation.

The economy added 199,000 jobs, said the Department of Labor, and unemployment fell to 3.7 per cent.

Wage growth accelerated to 0.4 per cent from the prior month but held steady from year-ago levels.

Although employment appears to be heating up, analysts noted the underlying state of the labour market has been weakening. The figures could also be revised downwards.

The latest hiring uptick comes on the back of October figures that were temporarily bogged down due to strikes by auto workers in Hollywood.

“Employment growth is below the average monthly gain of 240,000 over the prior 12 months but is in line with job growth in recent months,” said the Labor Department.

The figures are closely watched by markets and the Federal Reserve as policymakers ponder how to handle interest rates in order to fight stubborn inflation.

The central bank is due to announce its next rate decision at the end of a policy meeting next week.

President Joe Biden, who is running for reelection next year, lauded the low unemployment and overall drop in inflation.

“But I know prices are still too high for too many Americans. So my top economic priority is to lower costs for hardworking Americans,” he added in a statement.

Returning workers

“Payroll gains were inflated by returning strikers in November, but the underlying pace of job growth has slowed in recent months,” said Nancy Vanden Houten, lead US economist at Oxford Economics.

By some estimates, headline growth was boosted by about 30,000 on the return of auto workers.

Resilience in income gains is also expected to support consumption during the holiday season.

Rubeela Farooqi, chief US economist at High-Frequency Economics, said she continues to expect a cooling in the labour market as the effect of higher interest rates flows through the economy.

She added that the latest data is unlikely to change the Fed’s outlook and she expects the central bank to cut the benchmark lending rate, probably by mid-2024.

“Overall, the labour market remains strong, with job growth still robust and the unemployment rate at extraordinarily low levels,” said Farooqi.