American employers added 266,000 jobs in November, far above the 180,000 expected by economists, while the unemployment rate fell to 3.5%, matching a 50-year low. The U.S. Bureau of Labor Statistics reported the employment numbers this morning in their monthly release.
Employment rebounded by 54,000 in manufacturing following last month’s decline of 43,000. Most of this increase was due to the return of 41,000 workers in the automotive sector following the ending of a labor strike at GM. Significant job gains were also seen in the health care sector and in professional and technical services.
The strong economy continues to pull people back into the workforce with the number of people marginally attached to the labor force down 432,000, or 26%, from 1.6 million 12 months ago. Marginally attached workers are defined as those who wanted and were available for work and had looked for a job in the last 12 months but had not tried to find a job in the last four weeks.
Average hourly earnings for private-sector nonfarm employees continued their upward trend, rising by 7 cents per hour to $28.29. Over the past 12 months, wages have risen 3.1%. Through October, inflation was up 1.8% as measured by the Consumer Price Index (CPI), meaning that wages are rising faster than inflation, with real earning power increasing.
The previous two months’ nonfarm jobs estimates were also revised upward by 41,000, with September’s estimate increased from 180,000 jobs to 193,000 and October’s increased from 128,000 to 156,000. Over the past three months, nonfarm payroll employment has increased an average of 205,000 jobs, a bit above the average monthly gain of 180,000 for 2019 but below 2018’s pace of 223,000.
In what has appeared to become a monthly tradition, analysts warned of a slowdown in the jobs market. Mark Zandi, the chief economist at Moody’s Analytics, said, “The job market is losings its shine.” Zandi noted that, “Manufacturers, commodity producers, and retailers are shedding jobs. Job openings are declining and if job growth slows any further unemployment will increase.” The unemployment rate fell slightly in this month’s report. Meanwhile, Ian Shepherdson of Pantheon Macroeconomics said that there was no sign that the jobs market would recover soon, labeling employment indicators from ADP’s payroll report issued on December 5 as “grim” but “…consistent with the message from business surveys and other leading indicators.”
The economy’s resilience in what has become America’s longest expansion in history at 125 months continues to confound many economists. In all likelihood, the federal tax cut signed into law by President Trump in December 2017, combined with a significant rollback in red tape, has overmatched the imposition of tariffs on some goods along with trade tension with the People’s Republic of China that has disrupted supply chains. In the wage of the passage of the Tax Cuts and Jobs Act of 2017, the U.S. now has the 4th-lowest tax rates in the world among 34 advanced economies surveyed, with only Ireland, Chile, and Mexico having lower taxes as a share of the economy than the U.S. Taxes as a share of GDP in 2018 were the highest in France, 46.1%, almost double that in America at 24.3%.