Strong Jobs Report For November Quells Recession Fears

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The U.S. economy added 266,000 new jobs in November while the unemployment rate was basically flat at a 50-year low of 3.5%, according to the U.S. Bureau of Labor Statistics.

Notable job gains occurred in health care, as well as professional and technical services.

Employment also increased in manufacturing, reflecting the return of workers from a strike. 

The number of unemployed persons was basically flat compared with October at 5.8 million.

There was a slight decrease in the labor force participation rate, which dipped slightly compared with October to 63.2%.

Average hourly wages increased by seven cents or 0.2% to $28.29.

Over the last 12 months, average hourly earnings have increased by 3.1%, according to the report.

Average hourly earnings of private-sector production and nonsupervisory employees increased by seven cents to $23.83.

The strong increase in the BLS report is surprising considering that the ADP jobs report released on Dec. 4 shows a gain of only 67,000 jobs in November.

Odeta Kushi, deputy chief economist at First American, says the BLS report “outpaced expectations and supports the argument that we’re not facing an imminent recession.”

“The hit to business investment and manufacturing from trade tensions has resulted in an economy that’s reliant on one engine to sustain the expansion, and that’s U.S. consumers,” Kushi says in a statement. “Approximately 70 percent of U.S. economic growth is driven by consumer spending. The outlook for consumer economic strength remains strong, especially given that job creation continues, and wages are rising.”

“Today’s numbers point to a more competitive housing market next year,” Kushi says. “Job growth is steady, the unemployment rate fell to 3.5 percent, a 50-year low, and wages are rising modestly, which bolsters Americans’ spending power.

“Housing is the most durable consumer good we’ll ever buy and surging house-buying power fuels greater potential demand in a supply-constrained market,” she adds. “There’s no evidence that these dynamics will change in 2020.”

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