Job growth in the United States slowed in November with just 210,000 new jobs added during the month, falling well below economist expectations of 550,000. The unemployment rate also lowered by 0.4 percentage points to 4.2%, according to the latest Employment Situation Summary from the Bureau of Labor Statistics (BLS). Despite falling significantly short, economists were optimistic about the jobs numbers.
"Any way you look at it, the job market continues to improve," said Mike Fratantoni, Mortgage Bankers Association (MBA) senior vice president and chief economist. "The headline nonfarm payroll gain of 210,000 jobs in November was smaller than anticipated. However, as has been the case several times this year, there are reasons to believe that this understates the improvement."
He added that compared to November 2020, nearly six million more people are employed, noting that "the seasonal adjustment factors are less reliable given the volatility during the pandemic."
With economists still bullish about the labor market amid fewer job gains, it's likely that the Federal Reserve won't be deterred from raising interest rates next year. If you want to take advantage of low interest rates, consider refinancing your mortgage to lower your monthly payment. Visit Credible to find your personalized rate for a mortgage refinance and see how much you could save.
Inflation rising as unemployment rate declines
The Federal Reserve is already talking about speeding up its economic stimulus tapering to enable the raising of interest rates as early as the second quarter of 2022, if needed to combat inflation.
"As inflation continues to rise, Federal Reserve Chair Jerome Powell has indicated that he is open to ending the large-scale asset purchase program sooner than anticipated," said Dawit Kebede, Credit Union National Association (CUNA) senior economist. "Although the economy is not yet at maximum employment, a declining unemployment rate is a step in the right direction to fast track those changes."
However, fears over the coronavirus omicron variant could still cause disruptions to economic recovery even as the economy adds more jobs and a higher labor force participation rate.
"Labor force participation has increased for the first time in several months, showing a return to work by some who opted out due to COVID fears or lack of childcare," Kebede said. "Emergence of the new variant Omicron, which is more transmissible than Delta, could derail progress in labor market and exacerbate supply chain disruptions if cases continue to rise."
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Biden says employment outlook is strong
Rather than focusing on the missed expectations in the November jobs report, President Joe Biden spoke on the falling unemployment rate, which hit a level he said experts predicted wouldn’t come for another few years.
"Today, we have incredible news that our unemployment rate has fallen to 4.2% – a level experts didn’t expect us to achieve until 2024," Biden said Friday on Twitter. "We’ve created 588,000 jobs per month on average this year – a record. America is back to work, and our jobs recovery is going strong."
One expert said that as the U.S. economy moves toward pre-pandemic levels, it's difficult to use the most recent employment report as an indicator of labor market strength, saying that its data was recorded before several key changes.
"The utility of the employment report as an indicator of the near-term economic outlook is further diminished by the fact the reference week for the payroll survey was earlier in November, prior to the recent shift in Federal Reserve forward guidance on inflation and the emergence of the Omicron variant as a subject of concern for continued increase in labor force participation," said Mark Palim, Fannie Mae deputy chief economist.
If you want to take advantage of low interest rates before the Fed considers its next rate hike, consider taking out a personal loan to consolidate high-interest debt. Visit Credible to speak to a personal loan expert and get all of your questions answered.
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