US Adds 263,000 Jobs In November As Labor Market Stays Hot Despite Fed Hikes

The SPDR S&P 500 ETF Trust SPY traded lower Friday morning after the Labor Department reported strong U.S. jobs market numbers from November.

What Happened: The U.S. added 263,000 jobs last month, beating average economist estimates of 200,000 jobs.

New data from the Bureau of Labor Statistics showed the U.S. unemployment rate is at 3.7%, in-line with economist estimates. The labor participation remained unchanged at 62.1%, compared to the 63.4% pre-pandemic rate in February 2020.

Wages were up 5.1% year-over-year and increased 0.6% from October. The leisure and hospitality industry led the job creation in November, adding 88,000 total positions.

The Labor Department also revised September's total job growth lower by 46,000 jobs to +269,000 and October's job growth higher by 23,000 jobs to +284,000. The combined revisions totaled 23,000 fewer jobs.

Why It Matters: The Federal Reserve is paying close attention to the jobs market as the central bank continues its battle to bring inflation down to its 2% target range.

The Fed hiked interest rates by 75 basis points for the fourth time in five months in November, bringing its target fed funds rate up to a range of 3.75% to 4%.

The Consumer Price Index (CPI) was up 7.7% in October, down from a 2022 peak of 9.1% in June. Despite Friday's strong jobs report, the bond market is still pricing in a 69.9% chance the Fed will opt for a smaller 0.5% interest rate hike at its upcoming December meeting.

Market Action: S&P 500 futures were trading lower by more than 1.5% in Friday's premarket session.

Photo via Shutterstock.