US jobs growth beats forecasts in November, but wages fall short
The US jobs market continued generating jobs at a solid pace last month as accelerated hiring in mining and manufacturing offset a slowdown on the services side of the economy.
However, the rate of growth in wages again fell short of economists' forecasts despite November being a 20-day month, which according to Ian Shepherdson at Pantheon Macroeconomics usually lifts the wage data.
Total non-farm payrolls increased by 228,000 in November (consensus: 210,000), with 62,000 jobs being generated in goods producing sectors, up from 34,000 in October, according to the Department of Labor.
In private sector services on the other hand, job gains slowed from 213,000 for October to 159,000.
Despite solid job creation, the rate of increase in average hourly earnings only rose from a downwardly revised year-on-year pace of 2.3% in October to 2.5% last month (consensus: 2.7%).
Average hourly earnings grew by 0.2% month-on-month (consensus: 0.3%) while October's 0.1% rise was revised down to show a fall of 0.1%.
Average weekly hours on the other hand ticked higher, from 34.4 in the previous month to 34.5 (consensus: 34.4).
Combined, net revisions to non-farm payrolls for the prior two months were +5,000.
Meanwhile, the unemployment rate was steady at 4.1%, although a broader measures known as U6 unemployment increased by a tenth of a percentage point to 8.0%.
Nonetheless, Paul Ashworth at Capital Economics pointed out how the U6 rate was at 8.6% in August, so "the trend is still clearly downwards".
As well, both Shepherdson and Ashworth continued to expected wages to eventually move higher as the labour market continued to tighten.
According to Shepherdson, "By the time the Fed meets in March, we expect to see sub-4% unemployment, accompanied by a clear uptick in wages and no softening in the payroll trend; we think Mr. Powell's first meeting will bring a rate hike.
"Surveys point to another 200K-plus job gain in December, so the underlying trend is strong. This will push the unemployment rate below 4% very soon; the trend rate of growth of the labor force is only about 90K per month, though the numbers are very noisy in the short-term."
As of 1408 GMT, the yield on the benchmark 10-year US Treasury note was two basis points higher to 2.38% in response to the data.