The nation’s employers kept hiring briskly in November despite high inflation and a slow-growing economy — a sign of resilience in the face of the Federal Reserve’s aggressive interest rate hikes.…
The nation’s employers kept hiring briskly in November despite high inflation and a slow-growing economy — a sign of resilience in the face of the Federal Reserve’s aggressive interest rate hikes.
The economy added 263,000 jobs, while the unemployment rate stayed 3.7%, still near a 53-year low, the Labor Department said Friday. November’s job growth dipped only slightly from October’s 284,000 gain.
All year, as inflation has surged and the Fed has imposed ever-higher borrowing rates, America’s labor market has defied skeptics, adding hundreds of thousands of jobs, month after month.
With not enough people available to fill jobs, businesses are having to offer higher pay to attract and keep workers. In November, average hourly pay jumped 5.1% compared with a year ago, a robust increase that is welcome news for workers but one that makes the Fed’s efforts to curb inflation potentially more difficult. On a month-to-month basis, wages jumped 0.6% in November, breaking a streak of smaller gains that had suggested that pay growth might be cooling.
The strength of the hiring and pay gains raised immediate concerns that the Fed may now have to keep interest rates high even longer than many had assumed.
“This will be a reminder to the Fed and to the markets that the job on inflation is not done,” said Blerina Uruci, chief U.S. economist at brokerage T. Rowe Price. “They really need wage pressures to be on a more sustained downward path. So that certainly calls for interest rates to remain higher for longer.”
The report painted a picture of a job market in which the supply of available workers is falling just when many companies are still desperate to hire to meet customer demand. The proportion of Americans who either have a job or are looking for one declined for a second straight month, to 62.1%. Before the pandemic, that figure was 63.4%; the drop since then translates into about 3 million people.
Since the pandemic, many older workers have taken early retirement. In addition, several hundred thousand working-age people have died from COVID-19. And many families have struggled to find or afford child care, leaving some adults unable to return to work.
