(Bloomberg) — U.S. job growth slowed in November, posting the smallest increase this year, while the unemployment rate fell by more than forecast, offering a mixed picture of labor market progress.
Nonfarm payrolls increased 210,000 last month after an upwardly revised 546,000 gain in October, a Labor Department report showed Friday. The unemployment rate fell to 4.2% while the labor force participation rate edged up to 61.8%.
The median estimate in a Bloomberg survey of economists called for a 550,000 payrolls gain and for the jobless rate to fall to 4.5%.
The dollar turned lower and the Treasury yield curve steepened after the data reading. U.S. stock-index futures were still higher on the day.
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The jobs report is composed of two surveys — one of employers and the other of households. The employer survey showed hiring slowed across industries, including declines at automakers and retail outlets. The household survey showed robust job growth and people coming off the sidelines.
Job growth could be further restricted if the recent emergence of the omicron variant of the coronavirus leads to new restrictions and keeps people from looking for work.
While the headline number disappointed, the drop in the unemployment rate and the rise in labor force participation could help keep the Federal Reserve on track to possibly tighten policy faster than planned as inflation proves more persistent previously thought. The central bank’s dual mandate requires that it weighs both price stability and maximum employment, and some policy makers fear that cutting off monetary support too soon could hurt the jobs recovery.
“We have to balance those two goals when they’re in tension as they are right now,” Fed Chair Jerome Powell told the House Financial Services Committee on Wednesday. “I assure you we will use our tools to make sure this high inflation we’re experiencing does not become entrenched.”
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