United States unemployment rate falls to lowest level since August 2007

According to the United States government, the world’s largest economy created 178,000 jobs in November, slightly below 180,000 analysts expected, while October’s gains were revised down by 2,000 to 159,000. At 4.6%, the headline figure is the lowest since August 2007.

After the report, Fed Funds traders assigned about a 93 percent chance that the Fed would raise rates a quarter-point at its December meeting. The rate averaged 8.3% in the two years before the recession, reports the Wall Street Journal.

Average hourly earnings came in below the 0.2% estimate. Over the year, average hourly earnings have risen by 2.5%. It fell 0.2 points to 9.3 percent. “We are 89 months into the current expansion, just three months short of the famous 1980s boom-years expansion”, Andrew Chamberlain, Glassdoor’s chief economist, said in a note earlier in the week. Those people, who would have preferred full-time employment, were working part time because their hours had been cut or they were unable to find a full-time job.

After a rally of about 6.0 per cent in the past three weeks, USA stocks ended little changed in the wake of the jobs data on Friday.

These trends, though they began before Barack Obama’s presidency, may have contributed to support for Donald Trump during the presidential election. Trump has promised to spend heavily to rebuild America’s infrastructure.

The economy has added a monthly average of 180,000 net new jobs this year, down from an unusually strong 229,000 monthly average in 2015. If the labor market were really tightening, wages would be going up. Many economists view the wage gains as a sign that workers are demanding higher pay, which increases the possibility of inflation, preventable by an interest rate hike, the Washington Post reported. The unemployment rate dropped to 4.6% from 4.9%. It fell to 9.3% from 9.5%, the lowest level since April 2008.

An alternative rate-U6-derived from the same survey measures unemployment and underemployment.

But those new jobs aren’t evenly spread out across the economy. Manufacturing payrolls have now dropped for four straight months.

The number of those who lost jobs and persons who completed temporary jobs edged down by 194,000 to 3.6 million in November.

The winners for November included professional and business services, which added 63,000 jobs (up by 571,000 for all of 2016).

Yun further noted that that the retail sector shed jobs, but warehouse jobs increased, indicating that online shopping continues to make gains.

Health care employment rose by 28,000 in November.