The U.S. economy added a larger-than-expected total of new hires last month with upward revisions to the September and October tallies that suggest solid job market momentum into the end of the year.
The Bureau of Labor Statistics said 227,000 new jobs were created last month, a tally that topped Wall Street's 202,000 forecast and was well ahead of the upwardly-revised 36,000 reading from October, which was heavily impacted by a strike at planemaker Boeing and two major hurricanes in the Southeast.
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Average hourly earnings in November rose 0.4% from prior-month levels and were up 4% on an annual basis, the BLS said, with both tallies topping Wall Street forecasts.
The headline unemployment rate, however, edged higher to 4.2%, while the labor force participation rate slipped modestly to 62.5%.
“This month’s stronger than expected jobs report can be partly attributed to the boost in seasonal positions in preparations for an influx of holiday shopping," said Steve Rick, chief economist at TruStage.
"After last month’s disappointing report, this boost was much needed following nationwide strikes and a catastrophic hurricane season," he added. "This bounce back is a key indicator that while the market was hit heavily by outside forces in October, they did not leave long-term damage to the market, as unemployment is hovering below its natural rate of 4.5%”.
U.S. stock futures reversed earlier declines following the data release, with the S&P 500 now called 7 points higher and the Nasdaq priced for a 25 point advance and the Dow for a 85 point gain.
Benchmark 10-year Treasury note yields fell 3 basis points to 4.159% following the data release while rate-sensitive 2-year notes fell 6 basis points to 4.112%.
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The CME Group's FedWatch now suggests a 90% chance of a quarter-point rate cut later this month in Washington, up from 68% prior to the data release, with the odds of a follow-on move in January now trading at 27.1%.
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"These data clear the path for the Federal Reserve to further reduce the policy rate in December--nothing in these jobs data supports a pause in normalization," said Jamie Cos, managing partner at Harris Financial Group.
"The labor market has stabilized and remains stronger than all of the naysayers have led people to believe. A stable labor market supports a strong consumer based economy, and that's exactly what the data have shown all year long," he added.
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