General Motors workers returning from the picket lines gave a hefty boost to November’s jobs report, which saw the economy adding an outstanding 266,000 jobs during 2020’s penultimate month.
The addition, reported by the Bureau of Labor Statistics, handily eclipsed economist expectations of 187,000. The unemployment rate shed a tenth of a percentage point from October to fall to 3.5% — matching September’s reading as the lowest since 1969.
Even the manufacturing sector, which had been shedding jobs for months, added 54,000 jobs in November. The October return of GM workers after the strike-fueled exodus was a big part of the bounce-back, as employment in motor vehicles and parts was up by 41,000 in November.
GM workers coming back to work also affected October’s jobs total, which was revised upwards from 128,000 to 156,000. Joel Kan, associate vice president of economic and industry forecasting for the Mortgage Bankers Association, noted that November’s numbers, combined with upward revisions to the previous two months, raised the 2019 average to about 180,000 jobs per month.
According to Kan, this indicates “a very strong labor market,” in stark contrast to the average of 167,000 per month before November’s job report came out. In fact, before the latest figures, the 1.67 million jobs added so far in 2019 were the lowest total in nine years. While the monthly figures for the year still pale compared to last year’s — 2018 saw a stout monthly jobs average of 233,000 — many experts agree that robust reports over the past two months have been enough to quell the chorus of a potentially impending downturn.
“The final jobs report of the year outpaced expectations and supports the argument that we’re not facing an imminent recession,” said Odeta Kushi, deputy chief economist for First American Financial Corp.
Even income growth numbers, which had been underwhelming of late, showed signs of life. Wage growth was up 3.1 compared to last November, “more closely aligned with home-price appreciation,” Kan said.
Kushi did observe that the economy is still severely imbalanced due to manufacturing weakness, though the consumer side remains robust.
“The hit to business investment and manufacturing from trade tensions has resulted in an economy that’s reliant on one engine to sustain the expansion, and that’s U.S. consumers,” she said. “Approximately 70 percent of U.S. economic growth is driven by consumer spending. The outlook for consumer economic strength remains strong, especially given that job creation continues, and wages are rising.”
That consumer strength continues to bode well for the housing market, Kushi added.
“Housing is the most durable consumer good we’ll ever buy and surging house-buying power fuels greater potential demand in a supply-constrained market. There’s no evidence that these dynamics will change in 2020.”