INSUBCONTINENT EXCLUSIVE:
WASHINGTON: US job growth increased by the most in 10 months in November as former striking workers returned to General Motors' payrolls and
the healthcare industry boosted hiring, the strongest sign yet the economy was not in danger of stalling.
The Labor Department's closely
watched monthly employment report on Friday also showed steady wage gains and the unemployment rate falling back to 3.5%, suggesting
consumers will continue to drive the longest economic expansion in history, now in its 11th year.
The report added to other fairly upbeat
reports on the trade deficit, housing and orders for big-ticket goods
Together, the improving data validate the Federal Reserve's decision in October to cut interest rates for the third time this year but
signal a pause in the easing cycle that started in July when it reduced borrowing costs for the first time since 2008.
U.S
central bank policymakers are expected to highlight the economy's resilience when they meet on Dec
10-11, though trade tensions continue to reverberate in the background.
"This was a strong report, with a solid rise in payrolls, another
drop in the unemployment rate, and decent growth in hourly earnings," said Chris Low, chief economist at FHN Financial in New York
"The Fed will see this as clear vindication of their decision to stop cutting rates."
Nonfarm payrolls increased by 266,000 jobs last month,
with manufacturing recouping all the 43,000 positions lost in October, the government's survey of establishments showed
Employment growth was also boosted by a gain of 60,200 healthcare workers, the most since March.
The largest increase in payrolls since
January lifted job growth well above its monthly average of 180,000 this year
Economists polled by Reuters had forecast payrolls rising by 180,000 jobs in November
The economy created 41,000 more jobs in September and October than previously estimated.
The 40-day strike by about 46,000 workers at GM
plants in Michigan and Kentucky had restricted employment gains to 156,000 jobs in October
Even discounting the GM-related boost, employment growth exceeded 200,000 jobs last month.
The strong payroll gains suggest the Trump
administration's 17-month trade war with China, which has plunged manufacturing into recession, has not yet spilled over to the broader
economy.
The U.S.-China trade tensions have bruised business confidence and undercut capital expenditure
Though Washington and Beijing are working on a "phase one" trade deal, the United States has ratcheted up tensions with other trade partners
including Brazil, Argentina and France
President Donald Trump said on Thursday the United States was having meetings and discussions with China "that are going well."
Economic
growth estimates for the fourth quarter are converging around a 1.8% annualized rate
The economy grew at a 2.1% pace in the third quarter
Economists estimate the speed at which the economy can grow over a long period without igniting inflation at between 1.7% and 2.0%.
U.S
stocks were trading higher while the dollar gained against a basket of currencies
Treasuries were lower.
STEADY WAGE GAINSThe surge in November payrolls defied an Institute for Supply Management survey showing a measure of
manufacturing employment contracted in November for the fourth straight month
It also confounded the ADP National Employment report showing a sharp deceleration in private payrolls growth last month and consumers'
perceptions of the labor market were less upbeat.
But cooler-than-normal temperatures in November curbed hiring at construction sites and
mines.
Though the labor market remains resilient despite the business investment downturn, hiring has slowed from last year's average
monthly gain of 223,000 because of ebbing demand and a shortage of workers
The government has said it could cut job growth for the 12 months through March 2019 by at least 500,000 jobs when it publishes its annual
revision next February.
Still, job creation is well over the roughly 100,000 jobs per month needed to keep up with growth in the working-age
The unemployment rate fell one-tenth of a percentage point last month from 3.6% percent in October as people left the labor force.
The
smaller household survey from which the unemployment rate is derived also showed a modest job gain last month.
A broader measure of
unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find
full-time employment, fell to 6.9% last month from 7.0% in October.
The labor force participation rate, or the proportion of working-age
Americans who have a job or are looking for one, dipped to 63.2% in November from more than a six-year high of 63.3% in October.
The tight
labor market is generating steady wage gains
Average hourly earnings rose seven cents, or 0.2%, after increasing 0.4% in October
In the 12 months through November, wages rose 3.1% after advancing 3.2% in October.
Wage gains were moderate because the bulk of the jobs
created last month were in healthcare and leisure, industries that tend to pay low wages
Average hourly earnings for production and non-supervisory workers increased 0.3% and were up 3.7% on a year-on-year basis in
November.
"Conditions remain firmly in place for the consumer and the service sector to cushion the economy from external risks and related
manufacturing," said Brian Coulton, chief economist at Fitch Ratings in New York.
Manufacturing employment rebounded by 54,000 jobs last
month as GM strike returnees boosted payrolls in the auto sector
Snow storms in the Midwest and cold weather restricted construction hiring to only 1,000 jobs last month
Mining shed 7,000 jobs.
The leisure and hospitality industry hired 45,000 workers
It has added 219,000 jobs over the last four months, with about two-thirds of the gains at restaurants and bars.
There were increases in
professional and business services, financial activities, retail and wholesale trade employment last month
Government employment increased by 12,000 jobs.
