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After a worryingly low October jobs report, the latest Bureau of Labor Statistics employment data, released Friday, saw a rebound in hiring, while wage growth stagnated and unemployment ticked up slightly. Let’s dive in.
Jobs rebound. Employers added 227,000 jobs in November, a significant increase from the revised 36,000 job gains in October, which was marred by severe weather and strike activity.
Transportation equipment manufacturing increased by 32,000 jobs in November, boosted by Boeing’s machinists returning to work following their seven-week strike. Additionally, healthcare added 53,600 jobs, while accommodation and food services added 34,600. Retail trade, however, saw the largest decline in roles, dropping by 28,000 last month.
Slowing wage growth. Average hourly earnings rose by 13 cents to $35.61 in November, a 0.4% increase. Average hourly earnings over the last 12-month period increased by 4.0%, unchanged from October. This could point to stabilizing wage increases after several years of skyrocketing wages meant to keep up with inflation.
“You are seeing a continual disinflationary environment. There’s pressure coming off wages. They’re still going up, but as we enter into budgeting for 25 after several years of historically high increases to salary budgets…our clients are telling us across the board, that they’re going in with more modest salary budgets than what they’ve come in the last few years,” Patrick Connell, partner and industry sector head at Aon, said. He also noted, however, that some companies, like those in parts of the technology sector, may still have to make significant increases to keep up with skilled labor shortages.
Mixed bag on unemployment. Overall unemployment increased slightly to 4.2% in November. Long-term unemployment increased year over year from 1.2 million in November 2023 to 1.7 million last month.
Despite the recent uptick, unemployment still remains historically low, and employers still continue to face growing talent shortages that could impact their recruiting strategies, Dan Beck, SAP SuccessFactors president and chief product officer, told HR Brew.
“There is an expectation of, I’d say, both cautious optimism and yet things could change quickly,” he said.
Organizations should focus on skills-based, data-driven workforce development strategies, Beck added, like promoting internal mobility, developing a skills-based recruiting and retention strategy, and staying on top of workforce data so that they are prepared to act should things change next year.
“The key thing is to understand your workforce, have the data at your fingertips, and if it’s a highly volatile 2025, well, then you’re able to move,” he said. “And if you are seeing an uptick in business…then you can put down the accelerator on hiring and [have] more growth within the firm.”