The pace of job growth slowed in November (+263,000), the unemployment rate remained at 3.7%, and the labor force participation rate hasn’t increased since January 2022.
But average hourly wages rose 5.1% in November compared to a year ago as employers seek to retain employees in a high inflation environment.
Accommodation and food services added 78,000 jobs in November, followed by health care (+44,700), local government (+32,000), social assistance (+23,400), and construction (+20,000). Most other industries were little changed except for retail trade which lost 29,900 jobs.
Quits rate is declining but remains elevated. Three industries are above the national average rate (2.9%): Accommodation and food services (5.8%), transportation, warehousing, and utilities (3.8%), and arts, entertainment, and recreation (3.4%).
Employers are hanging onto workers: The layoff rate remains at its record low and the share of U.S. adults who fear they could lose their job in the next month ticked down in November, and is sitting near its low point according to a recent poll.
Outlook: Continued robust wage growth will discourage the Federal Reserve from moderating its expected interest rate increases and increasingly pressure company profits.