Economy adds 266K jobs in November, blowing past expectations

Economy adds 266K jobs in November, blowing past expectations
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The U.S. added 266,000 jobs in November, the Labor Department reported Friday, blowing past expectations as the American economy continues to push through a global slump.

The unemployment rate remained steady at 3.5 percent during November, while the labor force participation rate also stayed even at 63.2 percent. The October jobs gain was also revised up by 28,000 jobs to 156,000, while the September jobs gain was revised up 18,000 jobs to 193,000.

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The report brings the average monthly job gain over the past three months to 205,000. 

Economists had projected the U.S. to add roughly 180,000 jobs in November, including a boost of roughly 40,000 General Motors workers that returned to work after a 35-day strike. The end of the GM strike plus strong expansion in the health care, professional and technical services sectors powered the U.S. economy through lags in manufacturing and trade activity.

"Employment gains blew the consensus and our expectations out of the water," wrote Sophia Koropeckyj, managing director for Moody's Analytics, in a Friday research note. "While we expected a reversal of October's auto industry losses, if we subtract that anomaly, payroll gains still exceeded 200,000 in November."

Wage growth also edged up to a 3.1 percent annualized gain, though below the rate economists expect for an economy with such low unemployment.

"This suggests that employers are successfully keeping a lid on costs and are likely making up for the modest increases in wages through other perks," Koropeckyj wrote.

The U.S. economy has remained steady and growing despite a persistent decline in industrial output and exports driven in part by President TrumpDonald John TrumpNational Archives says it altered Trump signs, other messages in Women's March photo Dems plan marathon prep for Senate trial, wary of Trump trying to 'game' the process Democratic lawmaker dismisses GOP lawsuit threat: 'Take your letter and shove it' MORE's trade battles. Slumping economic growth across Europe and Asia has also weighed on U.S. business investment, capital expansion and exports.

Even so, the consumer sector has remained largely unscathed throughout 2019, boding well for President Trump as he seeks to ride a strong economy to reelection in 2020.

"This is an excellent jobs report late in the business cycle and something of an early holiday gift for the economy and investors," wrote Jospeh Brusuelas, chief economist at tax and consulting firm RSM, in a Friday research note.

Trump is banking on low unemployment and ample consumer confidence to maintain the support in industrial midwestern states he will need to secure another term. The president has often pointed to the strong economy when criticizing Democratic efforts to impeach him, citing the steady rise in stock prices during his term in a Friday tweet.

“'It’s the economy, stupid,'” Trump tweeted Friday, riffing on the unofficial slogan of former President Clinton's 1992 presidential campaign.

Incumbent presidents seeking reelection are often closely tied to the success of the U.S. economy, making November's report a useful tool for Republicans making the case for another Trump term.

"@realDonaldTrump is delivering on his promises and Americans are winning again," tweeted House Minority Leader Kevin McCarthyKevin Owen McCarthyCalifornia sues Trump administration over fracking Trump: Impeachment timing intended to hurt Sanders Overnight Energy: Schumer votes against USMCA, citing climate impact | Republicans offer details on their environmental proposals | Microsoft aims to be carbon negative by 2030 MORE (R-Calif.), a close ally of the president. 

While the U.S. has defied expectations of an economic slowdown and earlier fears of a recession, there are still several risks to the economy heading into 2020.

Trump is still seeking resolutions to his trade war with China and escalating battle with the European Union. The president is set to impose a new tranche of tariffs on more than $100 billion in consumer goods from China on Dec. 15, which could strain household budgets at the start of 2020. 

And though the broader job market remains strong, U.S. manufacturing jobs have flatlined throughout the year despite Trump's pledge to revive American factories.

"Trump's promise that manufacturing jobs will boom has sputtered," said Scott Paul, president of the Alliance of American Manufacturing, a trade group for U.S. industrial firms.

"While there has been periodic bluster about policies to boost infrastructure and stop China's cheating, no real progress has been made to date. American workers deserve better from the Administration and Congress."

Updated at 10:17 a.m.