Key takeaways
- The U.S. economy added 227,000 jobs in November 2024, surpassing expectations and staging a robust rebound from the previous month. Notably, job gains for October were revised upward to 36,000 from 12,000, and September’s gains were adjusted to 255,000 from 223,000.
- While most indicators have returned to pre-pandemic levels (including the unemployment rate, which ticked up to 4.2%), wage growth remains an exception. Average hourly earnings increased by 4% year-over-year, which could support consumer purchasing power and confidence.
- Elyse Ausenbaugh, our Global Investment Strategist, believes this jobs report “bolsters our call on the Fed’s policy path from here – expect a gradual journey back to what the Fed describes as a ‘more neutral level.’ A cut in December looks likely, followed by four cuts in 2025 at an every-other-meeting cadence.”
- With a more balanced macroeconomic backdrop, Elyse emphasizes the importance for investors “to simultaneously focus on continuing to capture opportunity amid the soft landing while right-sizing allocations with a mindfulness on renewing portfolio resilience.”
Contributors
Cristina Dwyer
Analyst, J.P. Morgan Wealth Management
The U.S. economy added 227,000 jobs in November 2024, surpassing expectations and staging a robust rebound from the previous month. Notably, job gains for the prior two months were revised upwards by a total of 56,000, bringing the three month average payroll growth to 173,000. Additionally, job gains for October were revised upward to 36,000 from 12,000, and September’s gains were adjusted to 255,000 from 223,000.1
The rebound in the November jobs data is largely attributed to a recovery from disruptions in October, when job growth was weakened by hurricanes in the Southeast and a dockworkers’ strike.2
Our key takeaways from the November employment report are that the labor market remains firm and the economy is well balanced. As our Head of Investment Strategy Elyse Ausenbaugh observed, “COVID-era distortions seem to be fading away with metrics like job gains and the unemployment rates back to their pre-pandemic averages.”
U.S. nonfarm payroll employment
Monthly Change, Thousands
This chart shows the monthly nonfarm payroll employment change in thousands from June 2023 to November 2024.
- In May 2023, the nonfarm payroll was 339,000;
- In June 2023, the nonfarm payroll was 209,000;
- In July 2023, the nonfarm payroll was 187,000;
- In August 2023, the nonfarm payroll was 156,000;
- In September 2023, the nonfarm payroll was 336,000;
- In October 2023, the nonfarm payroll was 150,000;
- In November 2023, the nonfarm payroll was 199,000;
- In December 2023, the nonfarm payroll was 216,000;
- In January 2024, the nonfarm payroll was 353,000;
- In February 2024, the nonfarm payroll was 275,000;
- In March 2024, the nonfarm payroll was 303,000;
- In April 2024, the nonfarm payroll was 175,000;
- In May 2024, the nonfarm payroll was 272,000;
- In June 2024, the nonfarm payroll was 206,000;
- In July 2024, the nonfarm payroll was 114,000;
- In August 2024, the nonfarm payroll was 142,000;
- In September 2024, the nonfarm payroll was 255,000;
- In October 2024, the nonfarm payroll was 36,000;
- In November 2024, the nonfarm payroll was 227,000.
Source: Bloomberg Financial L.P. Data as of December 6, 2024.
Industry breakdown
In November, growth in nonfarm payrolls was primarily fueled by increases in several sectors. The healthcare sector added 54,000 jobs, while the leisure and hospitality sector added 53,000 jobs. Government employment rose by 33,000, and transportation equipment manufacturing employment rose by 32,000, indicating that dockworkers are returning to work following their strike. Additionally, the social assistance sector contributed with an increase of 19,000 jobs.3
Conversely, the retail trade sector saw a loss of 28,000 jobs. This drop followed little change the month prior and was primarily due to a sharp decrease in general merchandise retailers employment.4 This decline might reflect the later-than-usual Thanksgiving date, which possibly delayed hiring for the holiday season.
Meanwhile, employment levels remained relatively stable in other industries, such as mining, oil and gas extraction, and construction.5
Unemployment inched higher
In November, the unemployment rate ticked up slightly to 4.2% from 4.1% in October, remaining higher than the 3.7% rate in November 2023. The total number of unemployed individuals remained little changed at 7.1 million, still above the 6.3 number of unemployed individuals a year earlier.6
There was little change in the number of people who were not and are currently not actively looking for a job, discouraged workers or long-term unemployed workers. In contrast, the measure that includes both workers with part-time jobs for economic reasons and discouraged workers slightly increased to 7.8%.7
The labor force participation rate, which indicates the percentage of working-age individuals who are employed or actively seeking work, fell slightly to 62.5%.8
Wage growth remains sticky
While most indicators have returned to pre-pandemic levels, wage growth remains an exception. Average hourly earnings increased by a stronger 0.4% month-over-month and 4% year-over-year,9 but a broader set of wage indicators, such as job openings, continue to show slow normalization over time.
Ausenbaugh emphasized two things: “First, that the gains could continue to help consumer wallets and confidence adapt to the higher price levels brought on by recent years’ inflation pressures. Second, that it doesn’t need to shift the Federal Reserve’s (Fed) focus on recalibrating their policy stance.”
What could this mean for the Federal Reserve?
Ausenbaugh believes this jobs report “bolsters our call on the Fed’s policy path from here – expect a gradual journey back to what the Fed describes as a ‘more neutral level.’ A cut in December looks likely, followed by four cuts in 2025 at an every-other-meeting cadence.”
This jobs report follows the November Federal Open Market Committee meeting, in which the Federal Reserve (Fed) lowered interest rates by 25 basis points to bolster economic growth.10 Fed Chair Jerome Powell described the risks to the Fed’s dual mandate (maximum employment and stable prices) as “roughly in balance,” which should allow the economy to remain strong as the Fed lowers rates.
We expect the Fed to carefully assess upcoming data prints before its December 17 – 18 meeting. The November Consumer Price Index report, set to be released on December 11, will likely play an important role in the Fed’s decision-making as well.
What could this mean for investors?
With a more balanced macroeconomic backdrop, Elyse emphasizes the importance for investors “to simultaneously focus on continuing to capture opportunity amid the soft landing while right-sizing allocations with a mindfulness on renewing portfolio resilience.”
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