WASHINGTON — In November, the American job market showed improvement by adding 227,000 workers. This was a positive change from October, where strikes and hurricanes had a negative impact on employers’ payrolls.
Last month’s hiring growth was up considerably from a meager gain of 36,000 jobs in October. The unemployment rate ticked up to 4.2%.
The latest report from the Labor Department confirms that the job market in the U.S. is still strong, even though it has slowed down compared to the rapid growth seen in the 2021-2023 period when the economy was recovering from the pandemic recession. The Federal Reserve’s efforts to control inflation through high interest rates have contributed to this gradual slowdown.
Despite the Fed raising interest rates 11 times between 2022 and 2023, the economy continued to expand, defying expectations as consumers and businesses faced higher borrowing costs. However, starting earlier this year, the job market has started to decelerate.
Americans as a whole have been enjoying unusual job security. This week, the government reported that layoffs fell to just 1.6 million in October, below the lowest levels in the two decades that preceded the pandemic. At the same time, the number of job openings rebounded from a 3 1/2 year low, a sign that businesses are still seeking workers even though hiring has cooled.
The overall economy has remained resilient. The much higher borrowing costs for consumers and businesses that resulted from the Fed’s rate hikes had been expected to tip the economy into a recession. Instead, the economy kept growing as households continued to spend and employers continued to hire.
The economy grew at a 2.8% annual pace from July through September on healthy spending by consumers. Annual economic growth has topped a decent 2% in eight of the past nine quarters. And inflation has dropped from a 9.1% peak in June 2022 to 2.6% last month. Even so, Americans were deeply frustrated by still-high prices under the Biden-Harris administration, and partly for that reason chose last month to return Donald Trump to the White House.
While comparatively few Americans are losing jobs, those who do are finding it harder to land a new one: The average unemployed American in October had been out of work for 22.9 weeks, the longest such stretch in 2 1/2 years.
The progress against inflation and the slowdown in hiring, which eases pressure on companies to raise wages and prices, led the Fed to cut its key rate in September and again last month. Another rate cut is expected to be announced when the Fed meets Dec. 17-18.
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