The U.S. economy added another surprisingly strong number of new jobs last month, official data indicated Friday, as labor-market resilience continues to test Wall Street bets on spring interest-rate cuts from the Federal Reserve.
The Labor Department's Bureau of Labor Statistics said 199,000 jobs were created in November, a marked increase from the unrevised total of 150,000 recorded in October and largely in line with the five-month average of around 213,000. Economists were looking for a headline total of 180,000.
Average hourly earnings were up by a faster-than-expected 0.4% from the previous month, the biggest jump since July 2022. The year-on-year gain eased to 4% from 4.1%, a figure largely in line with the Wall Street consensus.
Average hourly earnings year/year looking steady but trend is lower from earlier in the year. pic.twitter.com/ZNvltKbr5W
— Kathy Jones (@KathyJones) December 8, 2023
The headline unemployment rate, meanwhile, eased to 3.7% from 3.9%, which was the highest of the year last month while he labor-force-participation rate rose to 62.8%, the highest level in more than two years.
The collective figures could support the Federal Reserve's position that inflation pressures are likely to remain elevated unless the labor market weakens. That tests market bets that the central bank will begin to lower its benchmark borrowing rates in the early spring.
“This month’s positive job growth following October’s slower numbers is evidence that the jobs market continues to be resilient," said Mutual of America Capital Management CEO Stephen Rich. "While many believe that the Federal Reserve may be done raising interest rates, we believe interest rates will remain elevated through at least the first half of 2024. The elongated rate-hike cycle has not ruled out the possibility of a recession late next year."
Related: Jobs Report Preview: Resilient labor market mystery confounds Wall Street
U.S. stocks were marked modestly lower following the data release, with futures contracts tied to the S&P 500 indicating a 6 point pullback and those tied to the Dow Jones Industrial Average suggesting a 15 point dip.
Benchmark 10-year Treasury note yields were marked 3 basis points (0.03 percentage point) higher at 4.224%, extending the paper's three-day increase to around 15 basis points. Benchmark 2-year notes were pegged 8 basis points higher at 4.702%.
The U.S. dollar index, which tacks the greenback against a basket of six global currencies, was marked 0.57% higher at 104.122.
The CME Group's FedWatch now indicates a 46.5% chance of a quarter-percentage-point Fed rate cut in March, down from 51.7% prior to the jobs data release, with the odds of a May reduction a virtual certainty at 99.7%.
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