Unemployment in the U.S. continued falling in November, hitting its lowest level since 2007, according to Labor Department figures issued Friday, as the trucking industry also contributed to some of the job additions.
Nonfarm payrolls rose by 178,000, while October’s level was revised down slightly to a 142,000 gain from 161,000 and the number of jobs added in September was revised upward to 208,000 from 191,000. The November increase was led by service-producing jobs rising 139,000 following a128,000 improvement in October.
So far in 2016, employment growth has averaged 180,000 per month, compared with an average monthly increase of 229,000 in 2015.
The November improvement pushed the unemployment rate down to 4.6% from 4.9% in October, its lowest level since August 2007. Both the November unemployment rate and the number of jobs added exceeded Wall Street expectations.
For-hire trucking added 1,110 jobs in November while there were 8,900 jobs added in the wider transportation and warehousing sector with most of these gains coming from warehousing/storage and couriers/messengers.
Overall, average hourly earnings for all employees on private nonfarm payrolls declined by 3 cents to $25.89, following an 11-cents increase in October. Over the year, average hourly earnings have risen by 2.5%, which compares to 2.3% in 2015 and 2.1% in 2014
“The continuation of solid employment gains is encouraging as it indicates that businesses remain sufficiently confident about the economic outlook that they are prepared to invest in more workers,” said Paul Ferley, assistant chief economist at RBC Economics. “As well, it implies growing income to fund further gains in consumer spending. Though overall GDP growth is expected to moderate from the third quarter’s 3.2% increase, solid employment gains are projected to keep activity in the fourth quarter at an above-average 2.1%."
This report follows several others in the past two weeks, including one from the Federal Reserve, that show the economy is expanding at a better pace that it was during the first half of 2016, with many analysts expecting the Fed to hike interest rates by .25% when it meets later this month. If that happens, it would follow a hike a year earlier of .25%, which was the first in many years.
“For the Fed, the November employment report simply reinforces the notion of moderate labor market conditions, not too hot, not too cold, but good enough to follow through with the expected December rate hike priced in with 100% certainty,” said Lindsey Piegza, chief economist at Stifel Fixed Income. “The market, meanwhile, is already looking out to 2017, with a new world of pro-growth policies expectedly ushered in by a Trump administration. This morning’s report does little to undermine the optimism already priced into the market, furthermore, it does little to justify such an extreme reaction since the presidential election.”