Nick Rummell

MANHATTAN (CN) — Despite worries from some and hopes by others that the U.S. labor market would shrink somewhat, it rebounded again with another positive jobs report, showing a gain of nearly 200,000 jobs in November.

The numbers are a significant uptick from last month’s jobs report — which showed the United States added 150,000 new positions — though they continue the general decrease seen since last year. The previous employment report for September was revised down slightly by 35,000 jobs, while October’s saw no revision.

Most of the difference between the October and November jobs reports seems to be from automakers and performers who had until recently been striking. The leisure and hospitality space also saw another increase in jobs, this time by 40,000, while retail trade employment fell by almost the same amount.

“Just when you think the economy is finally softening, it continues to show signs of strength,” said Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance.

The unemployment rate is hovering at 3.7%, which was a pleasant surprise, since many expected it to potentially rise to 4% or higher.

“A fully employed economy means that consumers can keep spending, and that dynamic should lead to economic growth and not a contraction, which so many people have been calling for, for so long,” Zaccarelli said. “The recession that seemed so inevitable at the end of 2022 still hasn’t arrived and may not come any time soon.”

On Wednesday, payroll company ADP released its own monthly jobs report, which showed the private sector gaining 103,000 jobs last month and a 5.6% year-over-year pay increase for people who stayed in their jobs. Those who changed jobs saw a median 8.3% increase in pay during that same period.

The job gains were entirely in the service-providing industries, with manufacturers, construction and mining operations losing a total 14,000 jobs. The gains also were focused primarily in the Northeast and South, with medium-sized companies employing 50 to 499 workers gaining the lion’s share.

“Restaurants and hotels were the biggest job creators during the post-pandemic recovery,” said ADP Chief Economist Nela Richardson in a statement. “But that boost is behind us, and the return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.”

The ADP data undershot what most experts had forecast, and it is the slowest report since summer 2021. However, that is a good thing for investors looking to put inflation in the rearview mirror and hoping to see interest rate cuts by the Federal Reserve in 2024.

“The softer turn of recent labor market releases reduces the risk that inflation pressures revive due to wage-price issues, making it easier for the Fed to pivot to rate cuts in 2024,” said Bill Adams, chief economist at Comerica Bank.

The Labor Department’s weekly unemployment report — with 220,000 initial claims filed in the week ending Dec. 2, and 1.8 million continuing claims — also shows a market that appears to be right where many investors want it.

“We think the claims data, along with other recent labor market statistics, are consistent with a job market that is cooling enough to rule out further rate hikes, but still healthy enough to preclude rate cuts from consideration any time soon,” wrote Nancy Vanden Houten at Oxford Economics.

The Fed meets for the last time in 2023 next week, when it is expected to keep interest rates at the current 5.25% to 5.5% range.

On Tuesday, the monthly job openings summary — released by the U.S. Bureau of Labor Statistics and known as the JOLTS report — showed a 617,000-job decline in openings for October, about half a million lower than the consensus forecast and the lowest it has been since early 2021.

The JOLTS report also revised its previously released job openings for September down by 203,000, while the hires rate has inched down to 3.7%, about where it was from fall 2015 through early 2018, Adams said.

The JOLTS report also appears to show that the surge of hiring and quitting that started immediately post-pandemic is finished. “That frenzy is over, and hiring and turnover are back down to rates in line with the pre-pandemic normal,” Adams said.