NOVEMBER JOBS REPORT: Resilient Job growth and Stable Inflation support Economic Optimism

By Bernard E. Anderson, Ph.D.
Whitney M. Young, Jr. Professor Emeritus, The Wharton School, University of Pennsylvania, and Senior Economic Advisor, National Urban League

Inflation, as measured by the personal consumption expenditure (PCE) index, has slowed significantly, declining from a peak of 7.2 percent in June 2022 to just 2.3 percent over the 12 months ending in October 2024. Core PCE, which excludes food and energy, also eased to 2.8 percent, down from a high of 5.6 percent in February 2022. The data suggest continued progress in stabilizing the economy while avoiding the feared "hard landing."

Despite this economic progress, job growth has decelerated as the labor market begins to normalize after the disruptions of the pandemic. Total nonfarm payroll employment rose by 227,000 in November, following an upwardly revised 36,000 gain in October. The unemployment rate edged up slightly to 4.2 percent, reflecting a gradual cooling in labor market demand.

The Black unemployment rate increased to 6.4 percent, compared to 3.8 percent for white workers, yielding a Black/white unemployment ratio of 1.7-to-1. While this is a notable improvement over the historical 2-to-1 disparity, racial inequities in employment opportunities persist.

Wage growth has moderated, with average hourly earnings rising 0.4 percent in November to $35.61, marking a 4.0 percent increase over the past year. This pace is consistent with the Federal Reserve's target of curbing inflationary pressure without overly suppressing economic activity. Similarly, the number of long-term unemployed rose slightly to 1.7 million, accounting for 23.2 percent of all unemployed workers.

Growth in consumer spending, which drives two-thirds of the economy, remains solid. Real GDP grew by 2.8 percent in the third quarter, underpinned by resilient household spending on goods and services. Investments in productivity-enhancing technologies, particularly artificial intelligence, continue to bolster the economy's growth potential, offering optimism for sustained long-term expansion.

Federal Reserve policy has played a pivotal role in controlling inflation. With inflation rates aligning closer to historical averages, the case for easing monetary restrictions strengthens. The Federal Reserve remains committed to its dual mandate of fostering maximum employment and maintaining price stability.

The economic outlook for 2025 remains cautiously optimistic, with inflation expected to decline further and consumer confidence gradually improving. While challenges such as racial disparities in employment and wage growth remain, the steady normalization of the labor market and continued productivity gains signal that the U.S. economy is on a path of sustainable growth.