US job growth accelerates in November, unemployment rate drops to 3.7%

U.S. job growth accelerated in November and the unemployment rate dropped to 3.7% even as more people entered the labor force, pointing to underlying strength in the labor market.
 

Nonfarm payrolls increased by 199,000 jobs last month, the Labor Department's Bureau of Labor Statistics (BLS) said in its closely watched employment report on Friday. Employment was in part boosted by the return of automobile workers and actors after strikes.
 

Data for October was unrevised to show 150,000 jobs added.
 

Economists polled by Reuters had forecast 180,000 jobs created. About 25,300 members of the United Auto Workers (UAW) union ended their work stoppages against Detroit's "Big Three" car makers on Oct. 31, the BLS strike report showed, while 16,000 members of the SAG-AFTRA actors union returned to work.
 

The employment report suggested that financial market expectations that the Federal Reserve could pivot to cutting rates as soon as the first quarter of 2024 were premature.
 

The U.S. central bank is expected to keep rates unchanged next Wednesday. It has raised its policy rate by 525 basis points to the current 5.25%-5.50% range, since March 2022.
 

Employment gains are well above the 100,000 jobs per month needed to keep up with growth in the working age population.

The unemployment rate dropped to 3.7% from nearly a two-year high of 3.9% in October. It had risen from a 53-year low of 3.4% in April. The increase, however, was driven by a rise in labor supply rather than companies laying off workers.
 

Average hourly earnings increased 0.4% after gaining 0.2% in October. That kept the annual increase in wages at 4.0% in November.