US Economy Doing Far Better Than Experts Predicted, 266,000 Jobs Created Last Month

On Friday, new government data revealed that the US added far more jobs than anyone expected in November.

According to the Bureau of Labor Statistics, 266,000 nonfarm payrolls were created in November, making the unemployment rate drop to a historically low 3.5 percent. This number was temporarily boosted by the six-week strike at General Motors ending, which had taken roughly 50,000 workers out of their jobs throughout October.

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Economy Outpaced Expert Predictions

Most Economists believed that would help lift payroll gains in November to 185,000, an increase from 156,000 in October.

“Looking at the high number of jobs that were added in November, you might forget that the story for most of this year was that the economy was slowing down,” said Nick Bunker of Indeed Hiring Lab, where he serves as research director. “The slowdown did happen, but we can move into 2020 with a bit more optimism.”

Wage growth outpaced inflation in November but was still below what might be expected with an unemployment rate at its lowest level in 50 years. Average hourly earnings rose 3.1 percent year-over-year last month, a small increase from October, but short of the peak growth levels seen earlier this year.

In what the Trump administration will no doubt hail as good news, November was the 110th consecutive month of job gains, but things have still slowed down compared to last year. The US has added an average of 180,000 jobs a month throughout 2019, which is down from an average monthly gain of 223,000 in 2018.

Daniel Zhao, a senior economist at the career site Glassdoor, said, “This report has important political implications as we move into an election year — the report today alleviates pressure on the Trump administration to make a trade deal with China, giving negotiators more leverage to push for a harder line.”

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How the Jobs Report Might Affect the Federal Reserve

The report released Friday is likely to bolster expectations for the Federal Reserve to maintain a wait-and-see approach. After the Fed lowered interest rates three times in 2019, it has signaled it sees no immediate need for any more efforts toward stimulating the economy.

Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said, “A repeat of this performance in December would be a different story, but we think downside correction is more likely. Still, today’s print clearly makes a January Fed easing much less likely.”

In any case, as the 2020 presidential election heats up, expect Democrats to downplay this good economic news, and for the White House to  continue singing its praises.