November US job gains defy expectations, piling pressure on Federal Reserve

Employers add 263,000 jobs while unemployment rate remains unchanged at 3.7%

Friday's report likely suggests the US Federal Reserve will continue to tighten its monetary policy through next year. AP
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US employers added more jobs than forecast for the month of November, complicating the Federal Reserve's intentions to scale back its interest-rate increases.

Total non-farm payroll employment increased by 263,000 last month, the US Labour Department said in a report on Friday. Job gains for October were revised from 261,000 to 284,000. The unemployment rate remained at 3.7 per cent.

A Bloomberg survey of economists had forecast payrolls increasing 200,000.

Average hourly earnings rose 0.6 per cent. That raised the average hourly earnings from the last 12 months to 5.1 per cent.

Stock futures fell following Friday's report as traders expected more aggressive actions from the Federal Reserve.

A softening of the US labour market is needed for the inflation to cool in the US, currently at 7.7 per cent, Fed Chair Jerome Powell has maintained.

Saying the labour market is only showing “tentative signs of returning to balance”, he said wage growth remains too high. And the labour market remains tight with 1.7 jobs available for every unemployed person in the country.

The labour market is “too great”, he said on Wednesday, because it will head to inflation.

Friday's report likely suggests the Fed will continue to tighten its monetary policy through next year.

Mr Powell said the central bank could scale back the size of its interest-rate increases “as soon as December” after raising it to between 375 and 400 basis points since March.

Traders anticipate the central bank to announce a new interest-rate increase of 50 basis points when the Federal Open Market Committee next meets on December 13-14.

Bloomberg contributed to this report.

Updated: December 02, 2022, 3:32 PM