November saw a surprising decline in the unemployment rate, suggesting that the labour market may not be cooling as swiftly as many had first believed.
According to data released by the Bureau of Labour Statistics on Friday, the unemployment rate decreased to 3.7% from 3.9% in October. Additionally, the US economy created 199,000 new jobs, a rise from the previous month due to the return of Hollywood stars and striking auto workers to the workforce.
According to a Bloomberg survey of economists, 185,000 new jobs would be added this month, and the unemployment rate would remain at 3.9%.
Early this week, data was released that indicated the labour market was cooling. The latest JOLTS survey, which measures job vacancies relative to the number of jobless people, showed on Tuesday that the ratio had dropped to 1.34, the lowest level since August 2021.
ADP released further labour market statistics on Wednesday, indicating that salaries continued to decline and private payrolls grew last month more slowly than anticipated. ADP specifically pointed out that the decline in positions related to leisure and hospitality in November may indicate a normalisation of the labour market, which might lead to a slowdown in payroll growth the following year.
The largest employers during the post-pandemic recovery were hotels and restaurants, according to ADP Chief Economist Nela Richardson. “However, that boost is now in the rearview mirror, and the rebound in the leisure and hospitality sectors points to more moderate hiring and wage growth across the board in 2024.”