Healthy Jobs Report for November Signals ‘Soft Landing’ Ahead for the Economy


The U.S. economy added 199,000 jobs in November – lower than the 12-month average but still above expectations – while the unemployment rate fell to 3.7%, according to the U.S. Bureau of Labor Statistics.

Industry sectors that saw the strongest job gains included health care, government and manufacturing. Employment in retail trade declined.

The number of unemployed persons stood at 6.3 million – basically flat compared with October.

The number of long-term unemployed (those jobless for 27 weeks or more) edged down to 1.2 million, or 18.3% of all unemployed persons.

The labor force participation rate was little changed at 62.8%. The employment-population ratio increased slightly to to 60.5%.

Wages continued to rise in November: The average hourly wage for all employees on private nonfarm payrolls rose by 12 cents, or 0.4%, to $34.10. Over the past 12 months, average hourly earnings have increased by 4.0%.

In November, average hourly earnings of private-sector production and nonsupervisory employees rose by 12 cents, or 0.4%, to $29.30.

Ksenia Potapov, economist for First American, says the report signals that a “soft landing” is likely in order – as the labor market cools the likelihood of another Fed rate hike remains low.

“Unemployment was primarily driven down this month by a decline in new entrants and re-entrants to the labor force, or those unemployed who have past work experience but were not in the labor force for a period of time,” Potapov says in a statement. “Overall, recent labor market data is signaling that a ‘soft landing’ scenario is increasingly likely. While job openings have pulled back, layoffs remain low. More labor supply takes the pressure off wages and makes finding new workers easier.

“Throughout the pandemic, employers struggled to fill vacancies as job openings far exceeded new hires,” Potapov adds. “That gap has narrowed, according to the latest JOLTS data. Job openings exceeded total hires by 2.8 million in October, the lowest level since March 2021.”

Selma Hepp, chief economist for CoreLogic, also sees a soft landing scenario:

“While the labor market continues to show signs of cooling, the cooling is falling in line with the soft-landing narrative – number of jobs are growing at a slower pace, wage growth also slowing down and relatively low number of lay-offs – all leading to a modest rise in the unemployment rate which suggest cooling of the U.S. economy in the coming year,” Hepp says in a separate statement.

Photo: Marten Bjork

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