The U.S. labor market showed little sign of slowing in November, with employers adding 263,000 jobs, a surprisingly robust pace amid a slowdown in the tech industry.
The unemployment rate, meanwhile, remained unchanged from 3.7 percent a month earlier, according to the Bureau of Labor Statistics.
The still-strong labor market continues to be one of the sturdiest pillars of an otherwise confounding economy. Americans are spending heavily, though they are saving less than they have in 15 years. Manufacturing activity contracted in November for the first time in more than two years. And although inflation is slowing, to 7.7 percent, it is still well over the Federal Reserve’s 2 percent target.
“The job market continues to chug along despite various headwinds,” said Daniel Zhao, lead economist at Glassdoor. “We are getting some mixed signals from the report—that isn’t a surprise at a time when the economy is at a turning point—but stepping back, this still points to a job market that is more resilient than we expected.”
The latest report reflects an incredibly resilient labor market, as the Federal Reserve aggressively raises interest rates in hopes of stifling demand enough to contain inflation. Policymakers are hoping to chip away at the number of new hires and job openings without setting off a rise in unemployment—and at least for now, economists say, that appears possible.
“We’re obviously in a moment of tremendous risk in the economy right now,” said Adam Ozimek, chief economist at Economic Innovation Group, a nonpartisan business organization. “You can’t rule out a recession, but the economy seems to be rebalancing toward sustainable growth.”
Job growth, though still brisk by any measure, has slowed down from a lightening-fast pace earlier in the year. Employers added 284,000 jobs in October, which was revised up by 23,000 from previously reported figures.
The Fed remains concerned, though, that a persistently hot labor market could lead to rising wages, which could then worsen inflation. Wage growth, which had been moderating in recent months, picked up in October and November. Fed Chair Jerome H. Powell this week stressed that as long as inflation remains too high, Americans’ wage increases will not translate to a higher standard of living.
“Right now people’s wages are being eaten up by inflation,” Powell said at an event at the Brookings Institution on Wednesday. “But if you want to have a sustainable, strong labor market, where real wages are going up right across the wage spectrum, especially for people at the lower end, you’ve got to have price stability. And until we restore that, we can’t get back to that place.”
Average hourly wages rose to $32.82 in November, a 5.1 percent increase from a year ago, which economists say puts additional pressure on the Fed to keep raising interest rates.
More broadly, the latest numbers show a bifurcation in hiring as Americans shift more of their spending away from goods to services. Many of the biggest job gains in November were concentrated in service industries, such as leisure, hospitality and health care. Meanwhile, employment fell in retail, transportation and warehousing as businesses scaled back on holiday hiring.
A separate government report earlier this week showed that there were 10.3 million job openings in October, down from 10.7 million a month earlier.
“There is a disconnect between workers and jobs,” said Giacomo Santangelo, economist at Monster.com. “You can say there are openings for every unemployed person, but that doesn’t match up to reality. There’s huge demand in nursing, but if you lost your job at Twitter or Meta or Alphabet, you’re not going to be a nurse.”
That divide is becoming increasingly clear as some companies have announced sweeping layoffs, while many others struggle to find enough workers. Some of the country’s largest employers, including Walmart, Amazon and Google, have recently cut thousands of white-collar jobs. Tech firms have weathered a particularly sharp slowdown with heavy job losses and hiring freezes, and media companies including CNN and Gannett newspapers announced layoffs this week. Meanwhile, employers in low-paying sectors such as education, health care and hospitality report widespread labor shortages. (Amazon founder Jeff Bezos owns The Washington Post.)
Roxanne Pauni, who owns a child-care center in Logan, Utah, says she’s hired at least 80 people in the last two years, though she’s currently down to 25. She’s raised hourly pay from $9 to $15, but still has trouble finding and keeping employees.
“You get a couple of good workers here and there, but some of them just last one or two paychecks,” she said. “It’s hard to compete when everybody else in the area is trying to hire, too.”