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US unemployment ticks down as hiring accelerates

The US unemployment rate edged down in November while wage growth accelerated from a month prior, government figures showed
The US unemployment rate edged down in November while wage growth accelerated from a month prior, government figures showed - Copyright AFP/File ANDREW CABALLERO-REYNOLDS
The US unemployment rate edged down in November while wage growth accelerated from a month prior, government figures showed - Copyright AFP/File ANDREW CABALLERO-REYNOLDS
Beiyi SEOW

The United States saw its jobless rate edge down in November while hiring rose more than expected, government data showed Friday, as policymakers mull the need for further efforts to cool the economy.

The world’s biggest economy added 199,000 jobs, said the Department of Labor, as the jobless rate ticked down to 3.7 percent.

Meanwhile, wage growth heated up to 0.4 percent from the prior month but held steady from year-ago levels.

Although employment appears to be heating up, analysts noted ahead of the report that the underlying state of the labor market has been weakening.

The latest figures are closely watched by markets and the Federal Reserve as policymakers ponder how to handle interest rates in order to fight stubborn inflation.

The central bank is due to announce its next rate decision at the end of a policy meeting next week.

A tight labor market could be cause for concern to officials keen to see price increases slow.

But the latest uptick in hiring comes on the back of October figures that were temporarily bogged down due to strikes by auto workers and in Hollywood.

“Employment growth is below the average monthly gain of 240,000 over the prior 12 months but is in line with job growth in recent months,” said the Labor Department in a statement.

– More to be done –

“Payroll gains were inflated by returning strikers in November, but the underlying pace of job growth has slowed in recent months,” Nancy Vanden Houten, lead US economist at Oxford Economics.

Rubeela Farooqi, chief US economist at High Frequency Economics, said she continues to expect a cooling in the labor market as the effect of higher interest rates flows through the economy.

She added that the latest data is unlikely to change the Fed’s outlook and she expects the central bank to cut the rate next year.

“Overall, the labor market remains strong, with job growth still robust and the unemployment rate at extraordinarily low levels,” said Farooqi.

Analysts also noted that even though the headline hiring figure is strong, current estimates could be revised.

“Every payroll number this year has been revised down, suggesting systemic bias in the initial prints, likely because of a falling initial response rate from smaller businesses,” Pantheon Macroeconomics said in a recent report.

Congressman Brendan Boyle, top Democrat on the House Budget Committee, lauded the recent job growth but said in a statement: “Even as America’s economy continues to lead the world, there is still more work to be done to bring down costs for our families.”

AFP
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With 2,400 staff representing 100 different nationalities, AFP covers the world as a leading global news agency. AFP provides fast, comprehensive and verified coverage of the issues affecting our daily lives.

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