U.S. Continues to Add Jobs at a Healthy Pace

U.S. employers added more jobs than expected in November, with a lift from actors and auto workers returning to work following strikes. Despite efforts by the Federal Reserve to cool the economy, job growth remains strong, and unemployment remains low by historical standards. 

Employers added roughly 199,000 workers to payrolls in November 2023, according to the Bureau of Labor Statistics (BLS). That was an improvement over the 150,000 jobs gained in October, but below the monthly gain of 262,000 jobs in September. Still, that recent job gain was above what economists were projecting (+180,000 jobs), inflated by the return of roughly 40,000 formerly striking auto workers and actors. 

Of note: Downward revisions to September 2023 data showed 35,000 fewer jobs were added than previously reported, down to 262,000 positions. The October 2023 growth number remained unchanged at 150,000 jobs.

Recent job gains were well below the monthly average of around 399,000 jobs added in 2022 but were in line with pre-pandemic norms. From 2015 to 2019, the U.S. economy added an average of roughly 190,000 jobs each month. 

On an annual basis, the nation gained nearly 2.8 million jobs in November 2023. Although that was the weakest annual gain since March 2021, it was above the average of around 2.4 million jobs added annually from 2015 to 2019. 

The U.S. economy has recovered all the net jobs lost during the COVID-19 pandemic. As of November, the nation had over 4.7 million more jobs (+3.1%) compared to the pre-pandemic employment level from February 2020. 

Jobs by Industry

Job growth in November was seen in eight of 11 major industry sectors. The most notable job base expansion was in the Education and Health Services sector (+99,000 jobs). Solid gains were also recorded in Government (+49,000 jobs), Leisure and Hospitality Services (+40,000 jobs), Manufacturing (+28,000 jobs), Other Services (+12,000 jobs) and Information (+10,000 jobs). Smaller job gains were seen in Financial Activities (+4,000 jobs) and Construction (+2,000 jobs).  

The increased employment in the Manufacturing and Information sectors reflected the return of workers following strikes. Job growth in Manufacturing was lifted by the return of striking autoworkers, which took Motor Vehicles and Parts employment up by 30,000 jobs. Additionally, the resolution in the Screen Actors Guild strike against Hollywood studios resulted in 17,200 jobs added in the Motion Picture and Sound Recording Industries, lifting the job count in the Information sector.

Of the three major industries that lost jobs from October to November, the deepest loss of 35,000 jobs was in the Trade, Transportation and Utilities industry. That job loss was primarily due to shrinking employment in Retail Trade (-38,400 jobs) which offset job gains in Wholesale Trade (+8,300 jobs). The Professional and Business Services sector also suffered sizable losses (-9,000 jobs), with the Employment Services subsector (-24,600 jobs) notably contributing to that downturn.

Most major industries have recovered all the jobs lost during the COVID-19 pandemic downturn. Professional and Business Services has seen the best recovery, with the recent job count coming in roughly 1.53 million positions ahead of February 2020 numbers. Also well ahead of pre-pandemic norms were Education and Health Services (+1.22 million jobs) and Trade, Transportation and Utilities (+1.09 million jobs).

Alternatively, some of the harder-hit sectors remain below pre-pandemic job counts. Despite recent gains, employment in the Leisure and Hospitality Services sector is still well below pre-pandemic employment counts (-158,000 jobs). Other industry sectors yet to recover all the jobs lost during the COVID-19 downturn include Other Services (-43,000 jobs) and Mining and Logging (-42,000 jobs).

Unemployment

The unemployment rate (U3 or headline unemployment rate, which is seasonally adjusted) edged down 20 basis points (bps) in November, with the rate registering at 3.7%. That was the lowest rate in four months and marked the 22nd consecutive month that the unemployment rate has remained below 4%. 

Since February 2022, the unemployment rate has been in a narrow range of 3.4% to 3.9%. At the onset of the pandemic, the unemployment rate climbed to 14.7% in April 2020. Prior to the pandemic, the unemployment rate clocked in at 3.5% to 5.7% from 2015 to 2019, averaging 4.4% during that period. Prior to 2023, the unemployment rate hadn’t registered below 3.5% since 1969.

The total number of unemployed persons in the U.S. registered at roughly 6.29 million in November, down from about 6.51 million in October.

The unemployment rate for adult men (20 years and over) was unchanged from October to November, remaining at 3.7%. The unemployment rate for adult women (20 years and older) decreased 20 bps to 3.1%. Meanwhile, the unemployment rate for teenagers (16 to 19-year-olds) dropped 180 bps from 13.2% in October to 11.4% in November.

Average Hourly Earnings

Average hourly earnings among employees on private nonfarm payrolls rose $0.12 (+0.4%) from October to November. That monthly increase took average hourly earnings to $34.10 in November. On an annual basis, average hourly earnings were up $1.30, a 3.7% increase year-over-year. Overall wage growth is now surpassing rising prices, as the Consumer Price Index (CPI) rose 3.2% in the year-ending October. The Fed’s target for inflation is currently at 2%.

Wage growth over the past year was strong across most major industries. The largest increases in earnings from November 2022 to November 2023 were recorded among workers in Mining and Logging (5.9%), Financial Activities (5.5%), Manufacturing (5.3%), Construction (4.9%), Leisure and Hospitality Services (4.6%), Trade, Transportation and Utilities (4.2%) and Professional and Business Services (4.1%). The smallest increases were among employees in the Information sector (2.3%), Education and Health Services (2.5%) and Other Services (2.9%).