The U.S. economy added 178,000 new jobs in November and the unemployment rate dropped to 4.6 percent, the lowest it’s been since August 2007, the Department of Labor reported Friday.
Friday’s jobs report beat private-sector forecasts, which were for around 170,000 new jobs.
November’s job gains provide one more indication that President-elect Trump will inherit a labor market near full employment when he takes office from President Obama in January, and that the coast is clear for the Federal Reserve to resume raising interest rates this month.
November’s jobs growth was easily enough to keep the unemployment rate trending down. As the ranks of the unemployed thin out, only about 50,000 to 100,000 jobs a month are needed to keep the jobs market healthy. Over the past three months, job creation has averaged 176,000.
November’s job creation was likely aided by a reversal of job losses from October due to Hurricane Matthew. About 16,000 jobs were lost in weather-sensitive industries on the East Coast as the storm buffeted the Atlantic Seaboard, according to Goldman Sachs, and those jobs were likely to return the next month along with normal job creation.
Altogether, Friday’s report indicated resilience. “The job market will continue to improve in 2017, although the pace of job growth will slow as businesses have more difficulty in finding workers,” wrote PNC economist Gus Faucher.
A broader rate of underemployment, one that takes into account people forced into part-time work and those on the margins of the workforce, dropped from 9.5 percent to 9.3 percent.
While the unemployment rate fell so much in part for the “wrong” reason, because the labor force shrunk during the month, there was more good news overall about participation in recent months.
Over the past year, the workforce has grown by 2.1 million as the participation rate has ticked up two-tenths of a percentage point to 62.7 percent, a sign of cyclical strength. Labor force participation rate plummeted in the wake of the financial crisis and is expected to continue falling in the long run as the Baby Boomers retire. But the post-crisis trend of workers dropping out because of poor prospects appears to have been reversed over the past year-plus.
One weak mark in Friday’s report was that hourly wages actually fell over the past 12 months, by 3 cents. That decline was partly driven by calendar effects, though, and wages are up 2.5 percent in the past year, in line with recent trends.
The business services and health care industries saw strong job growth in the month, adding 63,000 jobs and 28,000 jobs, respectively. There were also 19,000 new jobs created in construction. No industries lost significant amounts of workers, which was good news for the mining sector, which has lost 222,000 jobs since mid-2014 as the price of oil collapsed.
