The U.S. labour market had strong growth in November, showing signs of near full recovery since the hurricanes hit. The impressive growth has caused many analysts and politicians to try and convince President Trump to cancel his proposed fiscal stimulus package. Nonfarm jobs were up by 228,000 in November, which followed the solid improvement in October of 244,000. Though the October figure was revised by the government from 261,000, it was still a much higher increase than the 200,000 previously forecast.
Workers were also paid more in November, with average hourly wages up by 0.2 percent (5 cents), which helped reverse the decline of 0.1 percent in the previous month. With more wages came longer working hours. The average worker put in 34.5 hours a week, up from 34.4 hours in October, making it the longest it has been in five months. The unemployment rate held steady at 4.1 percent, which is a 17-year low. The increase in jobs was balanced out by the increase in labour force.
The strong performance of the U.S. labour market was met with a lot of praise for industry leaders, who worked hard to restore working conditions following the devastating weather. However, very little of the praise was directed towards the presidency, though this did not stop the White House for taking credit.
Economic analysts are critical of the President’s planned tax reforms. The Republican party wants to reduce the corporate income tax rate from 35 percent to 20 percent. Economists argue that the tax cuts should only be used when the economy is struggling. Given the current state, the tax cuts will boost wages, but it will also increase the inflation rate. The market is already near full employment and only needs to add 100,000 jobs a month to keep up.