U.S. Employment (November 2024)

Payrolls rebound in November, but unemployment rate ticks up to 4.2%  

• The U.S. economy added 227k jobs in November, in line with the consensus forecast calling for a gain of 218k. Payroll figures for the two prior months were revised higher by 56k.
• Private payrolls rose 194k, with the largest gains seen in health care & social assistance (+72.3k), leisure & hospitality (+53k), professional & business services (+26k) and manufacturing (+22k). The gain in manufacturing were largely payback from the month prior following the resolution of the Boeing strike. The public sector added 33k new positions last month. 
• In the household survey, civilian employment (-355k) fell by considerably more than the labor force (-193k), which pushed the unemployment rate up to 4.2%. The labor force participation rate fell 0.1 percentage points to 62.5% - a six-month low. 
• Average hourly earnings (AHE) rose 0.4% month-on-month (m/m), matching October's gain. On a twelve-month basis, AHE were up 4.0% (unchanged from October). Aggregate hours worked rose sharply, up 0.4% m/m.

Key Implications

• This morning's release provided further evidence that October's soft employment report was more to do with temporary effects stemming from hurricanes and labor disputes, and not a sudden deterioration in the labor market. Not only did job creation regain its vigor in November, but revisions to prior months were also a tad higher, and aggregate hours worked grew at the fastest pace in eight months. 
• Smoothing through the recent volatility, job gains have averaged 173k over the past three-months, or only a modest stepdown from the 186K averaged over the prior twelve-month period. But this likely overstates the degree of "strength" in the job market. A broader sweep of the data suggests that the labor market has already come back into better balance, and is no longer a meaningful source of inflationary pressure. Moreover, the fact that the labor force has contracted in each of the past two-months suggests that job seekers are starting to internalize the fact that jobs are becoming harder to come by – a further indication that the labor market is cooling. This should give policymakers the assurance they need to cut by another quarter-point later this month. But with inflation progress showing early signs of stalling and some of the incoming administration's policy proposals (including the potential for tax cuts and tariffs) viewed as inflationary, the Fed is likely to proceed more cautiously with easing its policy rate in 2025 (see report).

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.