Businesses in the U.S. hired 266,000 people in November, sending down the nation's unemployment rate a notch to 3.5%, the Labor Department said Friday.
The impressive numbers got a bit of an artificial boost from the end of the General Motors strike by autoworkers, which added more than 40,000 workers onto the payrolls who had been missing in. But even without the boost, major industries like health care, professional and technical services and leisure and hospitality all grew robustly in November.
"The economy is slowing, but companies' hunger for workers is still strong as shown by the latest jobs report," Robert Frick, corporate economist at Navy Federal Credit Union, said in a note.
November's figure overshot economists' expectations that about 180,000 new jobs would be added. Numbers for two prior months were also revised to show an additional 40,000 jobs created.
At this rate, 2019 will close with more than 2 million new jobs created — a slower pace of job creation than last year, but on par with 2017.
Wages grow modestly
Average hourly wages grew 3.1% from the year before. Wage growth has slowed from earlier this year, when average hourly wages in February were 3.4% higher than the year before.
"While this is still well above the rate of inflation, implying that real wages are rising at a reasonable clip, the overall increase is still surprisingly slow given the apparent tightness of labor markets," David Berson, chief economist at Nationwide, said in a note.
However, wages for production and non-supervisory workers — the non-managers who make up the bulk of the nation's workforce — grew faster than wages overall.
The strong hiring picture all but guarantees the Federal Reserve will keep interest rates steady at its December meeting, economists say.
"This report cements the Fed into 'wait and see' mode," Josh Wright, chief economist at recruiting company iCIMS, said in a note. "[Rate] hikes are out of the question right now, but it's hard to make a case for further cuts. We have a number of months to see how trade negotiations go and how prior rate cuts filter through the economy."
Not everyone can get a job
The hiring binge isn't without its weak spots. Among the unemployed, more than one-fifth, or 1.2 million, have been unemployed for six months or longer. That figure hasn't budged in a year, which is worrisome to some economists. The number of discouraged workers — meaning those who want to work but believe there isn't work available for them — has also been slow to drop.
"Those numbers have been extremely stubborn," said Julia Pollak, labor economist at the job marketplace ZipRecruiter. "We've seen far more discouraged workers than we should given the reduction in the unemployment rate. That could have to do with the opioid crisis, higher incarceration rates, or barriers to employment."