RALEIGH – The United States economy added 263,000 jobs in November 2022, according to the latest data release from the U.S. Bureau of Labor Statistics.
That total outpaced analyst and economist expectations following a report from ADP on private sector job additions that fell well short of expectations earlier this week.
But the strong jobs numbers, outpacing expectations for yet another consecutive month, may mean that the Federal Reserve could now again consider bumping up interest rates, perhaps to a higher target than was expected just yesterday.
“The increase in job growth is not good for the Federal Reserve’s efforts to reduce inflation,” said Dr. Michael Walden, an economist and a William Neal Reynolds Distinguished Professor at North Carolina State University, in an interview with WRAL TechWire on Friday. “Combining with yesterday’s report of strong consumer spending, it appears the Fed’s efforts to significantly slow the economy have not yet had a big impact.”
Fed has more work to do
According to the CME FedWatch Tool, the expected probability of the Federal Reserve increasing the federal funds rate by another three-quarters of a percent, or 75 basis points, at the next meeting of the Federal Reserve Open Markets Committee later this month has shot up by nearly 10 percent this morning, following the Labor Department report.
Yesterday, the probability of a 50 basis point increase was 78.2%. Now, that’s dropped to 69.9%. Meanwhile, the probability of a 75 basis point increase was 21.8% yesterday and has increased to 30.1% today.
“This report gives the Fed more work to do,” said Walden.
Private sector hiring slowed in November, below expectations
Sign of stress
Still, noted Walden, this particular report from the Labor Department tracks the job gains that were reported by businesses. There’s also a report that tracks job gains by asking American households, and that report showed that fewer people reported having any job, and the labor force participation rate fell, Walden explained.
“Taking the two reports literally, this means fewer people were working, but more people held multiple jobs,” said Walden. “This can be interpreted as a sign of stress in the economy.”
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