Continued Strong Gains
According to the labor department’s jobs report that was released Friday morning, the U.S. economy added 155,000 new positions this November and the unemployment rate held steady at 3.7%. The is the lowest rate since 1969.
Economists predicted close to 200,000 new positions to be added for the month so the report was a little underwhelming. Regardless, this makes 98 straight months of positive job growth, a record-long stretch.
Wage gains also came in strong at 3.1% across the board, matching October’s gains. These are the best wage growth figures since 2009.
Lower income groups are continuing to see the best wage gains, with the bottom 10% of earners seeing the largest increases. This is a positive attribute of such a long expansion, and continues a trend of the past few months.
Mixed Economic Signals
The November jobs report comes amid an odd time for the U.S. and global economy. Such a strong report continues the trend of positive employment and wage gains for everyday Americans. You would think such great numbers would be reflected throughout the entire economy.
Other economic signals are not so bright though. With the wide array of tariffs set up by the Trump Administration coming into effect over the past few months, many companies are beginning to feel the pressure of higher costs.
These trade tensions are causing anxiety across the board for investors. The S&P 500 is now down over 10% since its recent high. Indexes in other major economies are faring even worse, with Germany’s DAX price index and the Shanghai Composite both entering bear market territory as of recent (a drop of 20% or more since a recent high).
Global market struggles and trade tensions signal possible economic difficulty ahead, but the U.S. is likely safe for now. The U.S. economy is vastly a consumer based one, and strong wage and employment growth will keep household spending up.
Investors should take note of this strong labor report as reason to calm their anxieties about the market. So long as people are working and seeing healthy boosts in their take-home pay, the economy will continue to have strong performance.