US Economy Surges: In November, the US economy exhibited robust job growth, bolstered by returning actors and autoworkers who had been on strike. According to the Bureau of Labor Statistics, employers added 199,000 jobs, reducing the unemployment rate from 3.9% to 3.7%.
Contrary to some pessimistic predictions, the economy continues to perform well. Jane Oates, President of the employment education nonprofit Working Nation, highlighted the positive surprise, stating, “For the past two weeks, all weve heard is doom and gloom about how this is going to be a terrible day. And it was a much better day than was predicted.”
Economists had anticipated a net gain of 180,000 jobs, and the unemployment rate to remain steady. However, the actual numbers exceeded expectations. The labor force participation rate also increased to 62.8%, reaching its highest level since the onset of the pandemic.
Key sectors contributing to job gains were health care and government, with manufacturing experiencing a boost due to the return of striking autoworkers. The resolution of the Screen Actors Guild strike added jobs in the motion picture and sound recording industries.
Despite these one-time boosts, the underlying rate of job growth is estimated at around 160,000 jobs per month, aligning with the 2019 average. This job growth rate surpasses the “neutral rate” required to keep up with population growth.
Notably, the retail trade and temporary help services sectors saw declines, shedding 38,400 and 13,600 jobs, respectively. Oates attributes the retail job reduction to technological advancements influencing shopping behaviors, particularly the rise of e-commerce.
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Average hourly earnings rose 0.4% in November, outpacing the previous month’s 0.2% increase. However, on an annual basis, wage gains eased to 4% from the 4.1% rate seen a month before.
The strong jobs report in November aligns with the robust monthly gains witnessed in the pre-pandemic decade. Federal Reserve officials, while acknowledging the strength in the labor market, anticipate slower demand to help mitigate inflation.
Chairman Jerome Powell mentioned that the Fed would likely maintain some optionality for future rate hikes, emphasizing a cautious approach. The expectation is that policymakers will resist discussing rate cuts until early 2024, given the endurance of the labor market.
Our Reader’s Queries
How is the US economy doing right now 2023?
Despite initial pessimistic forecasts, the US economy has shown remarkable progress over the past year, with growth exceeding expectations. In fact, the private consensus for real economic growth, as measured by the Blue Chip Economic Forecast, had predicted a negative 0.1% for the year, but the actual growth has been significant.
Did the US economy grew 4.9% powered by consumers?
In the third quarter of 2023, the real GDP experienced a growth of 4.9% annually. Additionally, the total personal consumption expenditures (PCE) inflation increased by 0.4% in September, marking a 3.4% increase over the past twelve months.
Why is the US economy rising?
The economy experienced a 1.5% growth rate last quarter, which is the fastest in a year, thanks to higher wages. This growth was measured from the income side, and it’s a positive sign for the economy. Additionally, Gross Domestic Income (GDI) increased by 0.5% in the second quarter. However, on a year-on-year basis, GDI contracted at a 0.2% pace, which is the first decline in three years. Despite this decline, the overall growth rate is still promising.
Is the US economy at risk?
While a recession is still a possibility, the greater concern in 2023 is the potential for high rates that could negatively impact both stock and bond investors. Despite this risk, the US consumer and economy have shown resilience and continue to outperform. It’s important to keep an eye on these factors as we move forward.