Hiring in the United States remained strong in November, with employers adding 263,000 people

WASHINGTON– The country’s employers continued to hire vigorously in November despite high inflation and a slow-growing economy — a sign of resilience in the face of aggressive interest rate hikes from the Federal Reserve.

The economy added 263,000 jobs, while the unemployment rate remained at 3.7%, still near its lowest level in 53 years, the Labor Department said on Friday. Employment growth in November dipped only slightly from October’s gain of 284,000.

Last month’s hiring amounted to a substantial increase. Throughout the year, as inflation surged and the Fed imposed ever-higher borrowing rates, the US labor market defied doubters, creating hundreds of thousands of jobs month after month.

As employers continued to hire, wage gains followed. In November, the average hourly wage jumped 5.1% from a year ago, a robust rise that could complicate the Fed’s efforts to curb inflation. This week, Fed Chairman Jerome Powell pointed out in a speech that jobs and wages were rising too quickly for the central bank to quickly slow inflation. The Fed raised its benchmark rate from near zero in March to nearly 4% in an attempt to bring inflation back towards its annual target of 2%.

In the meantime, steady hiring and rising wages have helped US households stimulate the economy. In October, consumer spending grew at a healthy pace, even after adjusting for inflation. Americans increased their purchases of cars, restaurant meals and other services.

THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.

WASHINGTON (AP) — When the government releases the November jobs report on Friday, it could clarify whether growth in hiring and wages is gradually slowing — a trend the Federal Reserve says is vital in its fight against inflation. high.

In a well-attended speech Wednesday, Fed Chairman Jerome Powell pointed to a robust labor market as a key driver of higher prices, especially in service industries ranging from restaurants and health to entertainment and pet care.

Powell said the Fed would like to see slower job growth and more modest wage gains in the months ahead. The cost of goods such as used cars, furniture and appliances, Powell noted, is falling and housing costs are likely to slow next year. That leaves accelerating prices across much of the economy’s broad service sector as the most likely source of lingering inflationary pressures. These price spikes, the Fed chairman said, largely reflect rising wages.

“We want wages to rise sharply, but they need to rise to a level consistent with 2% inflation over time,” he said.

Yet, for now, paychecks are rising at an annual rate of about 5%, among the fastest in decades, and about 1.5 percentage points faster than the Fed would prefer. Wages are still trailing inflation, which was 7.7% in October, near a four-decade high.

Job growth has slowed this year, from a monthly average of 540,000 from January to March to 289,000 in the three months ending October. But that pace is still strong – far more than the Fed would like. Powell noted in his Wednesday speech that the economy only needs about 100,000 additional jobs per month to keep pace with population growth.

Any hiring above that level means the demand for workers exceeds supply and the labor market is still hot, said David Wilcox, a former Fed economist who is now at Bloomberg Economics and the Peterson Institute for International Economics.

Economists polled by data provider FactSet predicted employers added 200,000 jobs last month. This would represent the lowest total since December 2020, but would still represent a solid gain. The jobless rate is expected to remain at 3.7%, near a half-century low.

The U.S. economy continues to show signs of surprising resilience 18 months after inflation hit a 40-year high as the economy emerged from pandemic recession. In response, the Fed relentlessly raised interest rates.

Last quarter, the economy grew at a healthy 2.9% annual rate after shrinking in the first six months of the year. Consumer spending picked up and a surge in exports helped boost growth.

Americans continued to increase spending in October – even after adjusting for inflation – the government announced Thursday. Consumers increased their purchases of cars, restaurant meals and other services.

Although steady hiring and rising wages are further fueling spending, Americans are also increasingly turning to credit cards to cope with rising prices. Many are also tapping into savings, a trend that cannot continue indefinitely.

Other signs of weakness have raised concerns about a likely recession next year, in part because many fear that the Fed’s surge in rate hikes will eventually derail the economy. Particularly in the technology, media and retail sectors, a growing number of companies have made high-profile layoff announcements.

In addition to job cuts from tech giants like Amazon, Meta and Twitter, smaller companies – including DoorDash, real estate company Redfin and retailers Best Buy and Gap – have announced they will be laying off workers.

And in November, a measure of factory activity fell to a level suggesting the manufacturing sector is contracting for the first time since May 2020.

ABC News

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