US economy smashes forecasts, adds 266,000 jobs in November

Economists predicted that would help lift payroll gains to 185,000 in November from 128,000 a month earlier.
The report came amid concerns that one of the brightest spots in the economy has started to run out of steam.
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Government data out Friday showed the US added far more jobs than expected in November, relieving concerns that one of the brightest spots in the economy may have started to run out of steam.

The Bureau of Labor Statistics said 266,000 nonfarm payrolls were created last month, pushing the unemployment rate to a historically low 3.5%. The figure was temporarily boosted by the end of a six-week strike at General Motors, which had idled roughly 50,000 workers throughout October.

Economists predicted that would help lift payroll gains to 185,000 in November from 128,000 a month earlier.

Wage growth continued to outpace inflation last month but remained stubbornly below what would be expected with an unemployment rate at its lowest level in half a century. Average hourly earnings rose 3.1% year-over-year in November, a slight uptick from a month earlier but short of the peak gains seen in early 2019.

November marked the 110th consecutive month of job gains, but the record-long expansion has moderated this year as the effects of tax cuts began to fade and a global slowdown hit. The US has added an average of 167,000 jobs each month this year, compared with an average monthly gain of 223,000 in 2018.

A tit-for-tat trade dispute between the Trump administration and China has continued to escalate in recent months, raising costs for employers and casting a thick cloud of uncertainty onto hiring plans.

"The administration can no longer rely on endless good labor market numbers. Mostly, this is a self-inflicted wound," said Ian Shepherdson, the chief economist at Pantheon Macroeconomics. "The further downturn in labor demand evident in the surveys since late spring is a consequence of both the direct costs imposed on business by the tariffs and the crippling uncertainty over future trade policy."

Friday's report will likely bolster expectations for the Federal Reserve to maintain a wait-and-see approach at a policy meeting next week. After lowering interest rates three times this year, the central bank has signaled it saw little to no immediate need for additional stimulus measures.

"This fits with our overall view that the US economy is slowing, but faces only minor risk of recession," said Cailin Birch, a global economist at the Economist Intelligence Unit.

The labor market was slower to pull Americans from the sidelines in November. The labor-force participation rate edged lower to 63.2%, a figure that low by historical standards and compared with other countries.

This story is developing. Please check back for updates.

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