Jobs Increase in November, Unemployment Rate at 3.7%

(Image courtesy of Bureau of Labor Statisics)

Total nonfarm payroll employment increased by 199,000 in November, and the unemployment rate now sits at 3.7%, the U.S. Bureau of Labor Statistics reported.

Sectors with gains included health care, government and manufacturing. Retail trade declined.

November’s additions are below the average monthly gain of 240,000 over the past year, but above October revised data of 150,000.

“Wages increased at a 4% rate over the past year, a pace likely too rapid to be consistent with the Fed’s 2% inflation target,” said MBA SVP and Chief Economist Mike Fratantoni. “These trends, in combination with the drop in the unemployment rate to 3.7% from 3.9% in October, paint a picture of a job market that is still strong, even though the number of job openings has declined, and at least some sectors are seeing an increase in layoffs.”

However, the Fed has been aiming for a soft landing, and First American Economist Ksenia Potapov noted: “Overall, recent labor market data is signaling that a ‘soft landing’ scenario is increasingly likely. While job openings have pulled back, layoffs remain low. More labor supply takes the pressure off wages and makes finding new workers easier.”

“Overall, this report provides further evidence that the labor market remains healthy,” Mark Palim, Deputy Chief Economist at Fannie Mae, said. “The recent rapid decline in rates–in particular, the mortgage rate is down nearly 80 basis points since the end of October–along with continued job growth are beneficial for homebuyers; however, if labor markets remain this strong, we believe the pace of mortgage rate declines will likely not continue in the near term or may partially reverse.”