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Nonfarm payroll rose by 155,000 in November after a downwardly revised 237,000 the month before. Market expectations were significantly higher at around 200,000. Jobs gains occurred in healthcare, manufacturing, warehousing, and transportation.

Key Takeaways

• Economists surveyed by Dow Jones predicted 198,000 new jobs, making the actual figure surprisingly low.
• The average hourly wage rose 0.2%, falling short of the 0.3% estimated.
• October’s jobs count was revised down from 250,000 to 237,000.

Healthcare employment rose by 32,000 last month with ambulatory healthcare services adding 19,000 jobs and hospitals adding 13,000. Healthcare added 328,000 annually.

Manufacturing added 27,000 jobs in November, 6,000 in chemicals and 3,000 in primary metals with the rest distributed among other smaller categories. Over the year there were 288,000 new jobs in manufacturing, mostly in durable goods.

Transportation and warehousing saw 25,000 new jobs added to the payroll in November with couriers and messengers adding 10,000 new positions and warehousing and storage adding 6,000. 192,000 positions were added over the year.

32,000 jobs were added in professional and business services in November with 561,000 added over the year, and 18,000 jobs were added in retail trade employment. General merchandise stores added 39,000, miscellaneous retail stores added 10,000, while losses of 14,000, 11,000, and 11,000 occurred in clothing and clothing accessories stores, electronics and appliance stores, and sports and hobby stores respectively.

Other major industries such as mining, construction, wholesale trade, information, financial activities, leisure and hospitality, and government showed little change in November. On average and after revisions, jobs gains have increased by 170,000 each month over the last three months.

Payroll

The average workweek decreased by 0.1 hour to 34.4 hours in November, with the workweek and overtime unchanged in the manufacturing industry at 40.8 hours and 3.5 hours respectively.

Average hourly earnings for employees on private nonfarm payrolls rose by 6 cents to $27.35 with average hourly earnings rising 81 cents (3.1%) over the year. Private-sector production and non-supervisory employees saw an increase of 7 cents to $22.95 in November.

Expert Outlook

Senior economic advisor at PNC Financial Stuart Hoffman described the report as a “Goldilocks report” that kept a December rate hike “on the table.”
 

Nov jobs up 155K and U rate stays at 3.7%. Wages up 0.2% and holds at up 3.1% from yr ago. Three month avg job gains slow to a more moderate 170K/ mo. This “Goldilocks” report keeps Dec rate hike on table but support a pause in first half ‘19 and 2 hikes next yr. #FOMC

— stuart hoffman (@StuHoffmanPNC) December 7, 2018

Stephen Stanley, chief economist for Amherst Pierpont Securities, said “The collective judgment of financial market participants appears to be that the economy is falling apart and that the Fed is nearly done with rate hikes for the cycle.”

“This is still a solid gain that suggests economic growth is gradually slowing back toward its potential pace,” said Paul Ashworth, chief economist at Capital Economics in Toronto. “There is nothing here to suggest the economy is suffering a more sudden downturn.”

Market Reaction

Gold saw gains today in the face of the disappointing jobs data as the US dollar dipped slightly.

Spot gold is trading at $1,246.73/oz and up 0.7% at the time of writing.

As well as the data today, yesterday’s lower-than-expected figures on private sector jobs creation in November along with a drop in US factory orders have most likely contributed to traders favoring gold over the greenback today.