EconoFACTS

December 06, 2019 | 08:56

U.S. Nonfarm Payrolls (Nov. 2019) — Jolly Start to Holiday Season

Economist

Director and Senior Economist
Economics

Sal Guatieri is a Senior Economist and Director at BMO Capital Markets, with over two decades experience as a ma... (Read more)

Sal Guatieri

Director and Senior Economist
Economics

Sal Guatieri is a Senior Economist and Director at BMO Capital Markets, with over two decades experience as a ma... (Read more)

American companies ramped up hiring the most since the start of the year, possibly due to easing trade tensions and largely because of sturdy household spending. Nonfarm payrolls jumped 266,000 in November, trouncing the consensus call of around 180,000, and marking the biggest surge since January. Every sector except for wholesale trade added jobs. The auto industry rebounded 41,000 on returning GM workers. Private-sector jobs jumped 254,000 (so much for the ADP's head fake), and the six-month average (174,000) actually stepped up from the prior half year (166,000), casting doubt on the jobs-slowdown story. And, if there's any slowing, it's partly due to labour shortages. The jobless rate slipped back to September's half-century low of 3.5%, while the more comprehensive U6 rate returned to 19-year lows of 6.9%.

Still, wage inflation remains in check. Average hourly earnings rose 0.2% (actually 0.248%), though the yearly rate slipped to 3.1% from an upwardly revised level. That's still below the cycle high (3.4%) reached in February.

Aggregate work hours rose 0.2% for a second straight month, keeping our 1.6% GDP growth call for Q4 well on track. With a grade of 64.7, our jobs scorecard says the November report is the strongest this year, and tracking well above the neutral mark (50). A lengthy Fed hiatus seems warranted. All these new jobs will only put an extra spring in the step of holiday shoppers.

Table 1 - United States — Employment

(change in thousands)

Source: BMO Economics, Haver Analytics