US nonfarm payrolls rose above expectations in November

The delayed US labor employment report for November and a partial update for October, showed that nonfarm payrolls increased by 64,000 jobs, compared 105,000 drop in October, reflecting the departure of more than 150,000 federal employees, due to Trump administration’s decision to significantly reduce the number of government employees.

The data showed that US job growth accelerated in November following strong decline previous month, which was mainly driven by government spending cuts, but the unemployment rate jumped to 4.6% from 4.4% in October and beat forecast at 4.5% as the labor market was negatively impacted by President Donald Trump’s aggressive trade policy.

The slowdown in hiring was mainly caused by President Trump’s sweeping import tariffs, which have increased prices for many goods, resulting in consumers, mostly lower- and middle-income households, being more selective in their purchases and ultimately cutting back on spending.

The latest data will be useful for the US Federal Reserve, which cut the interest rate by another 25 basis points to the 3.5% – 3.75% range last week but signaled that borrowing costs were unlikely to fall further in the near term as they awaited clarity on the direction of the labor market and inflation.