Economy adds 227,000 jobs in November, suggesting a steady labor market: CEI analysis

Today’s labor report for November suggests a steady job market, with 227,000 jobs being added to the economy last month. Considering the report, the Fed should stay focused on eliminating inflation and lawmakers should cease their political push to constantly raise the minimum wage.

CEI Senior Economist Ryan Young:

“The labor market remains good. Any unemployment rate under 5 percent is good; in November it was 4.2 percent. If November’s job growth rate were to continue at its current pace, the economy would add 2.5 million jobs per year. This roughly tracks with population growth, which is what one would expect with roughly full employment.

“Today’s decent jobs numbers mean that the Federal Reserve can stay focused on inflation without fear of sparking a recession. While it had been forecasting a rate cut at its next meeting on December 17-18, it has been hedging lately. Holding rates steady may be the wise move, since inflation still has not returned to target, and deficit spending will remain high with the incoming administration.”

CEI Research Fellow Sean Higgins:

“The Labor Department’s Friday report notes that there are currently 4.5 million people working part-time for economic reasons, up 500,000 from a year ago. These are people who want to work full-time but either cannot find those jobs or have had their hours reduced. Limiting hours is the main means by which employers deal with minimum wage increases that raise their labor costs. In short, the political push to constantly raise the minimum wage has not benefited those low-income workers, many of whom now cannot find full-time work.  

“Also worth noting is that the Labor Department has revised last month’s job gains to 36,000, having found 24,000 jobs it previously missed. This should put the final nail into the coffin of the conspiracy theory claims that the department manipulates the data to help the current office holders. The simple reality is the department is struggling to keep track of a rapidly changing economy. The department has issued several major revisions of its data in recent months and, if that patterns holds, this month’s data will be significantly revised in the near future too.”