The number of new jobs created by the US economy in the month of November came in at 266000. The figure easily beat the consensus projection by American analysts which was predicting that the economy would produce a much more modest 180000. The November job creation total is the best monthly total for ten months. The figure was flattered by the return to work of GM staff who had been on strike.
The official level of unemployment also dipped in November from 3.6% to 3.5%. Most economists regard any level of unemployment below the 5% mark as essentially “full” employment. However, a sizeable proportion of the workforce continue to do part-time jobs and many jobs are nominally “freelance” where the employee has a precarious employment contract. It is this factor which stymies wage growth which should pick up as employers need to struggle to find employees of the right calibre to fill vacancies.
The number of people in part-time work that are looking for full-time work has improved, falling to 4.32 million which is below the 30-year average level. Despite this, the wage growth figure was a modest 3.1% for October (year-on-year).
According to the US Labor Department, November’s figures showed wider-ranging job creation gains including sectors which had been slow to recover after the Global Financial Crisis. The healthcare sector saw a particular boost in the November data.
Concerns amongst analysts about the domestic knock-on effects of President Trump’s trade war policy continue. A potential indication of this effect could be visible in the fact that despite strong job growth this year, the average monthly number of 180000 is well below the average for 223000 seen in 2018.
The current level of job creation should not lead to any further interest rate cuts by the Federal Reserve in the near future.