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Payrolls Jumped 266,000 Last Month, Crushing Expectations

Investing.com - The U.S. economy created many more jobs that expected in November, while the unemployment rate ticked lower and wage growth remained in check. That boosted stocks and send Treasury yields higher.

Nonfarm payrolls rose by 266,000, the Labor Department said Friday, handily topping expectations for a rise of 186,000, according to forecasts compiled by Investing.com.

That was the biggest rise in 10 months.

In addition, previous months were revised higher. September payrolls were revised up by 13,000 to 193,000 and October was revised higher by 28,000 to 156,000.

“Put all that together, and it says that payrolls growth over the past three months has averaged a healthy +205K” which smooths out auto strike-related volatility, University of Michigan economics professor Justin Wolfers tweeted.

The unemployment rate ticked down to 3.5% from 3.6%. Economist predicted it would remain steady.

“This does not feel like an economy that at great risk of recession; the Fed will likely be on hold for a while,” Carl Tannenbaum, chief economist for Northern Trust (NASDAQ:NTRS) tweeted.

Average hourly earnings rose 0.2%, lower than the 0.3% predicted, while year over year they are up 3.1%, indicating wage inflation remains in check.

“Wage growth continues to remain puzzlingly weak,” Wolfers said. “Over the past year, hourly earnings are up only 3.1%. That's the sort of number that's unlikely to worry the Fed much (even as it continues to be puzzled by such low wage and price growth at such a low inflation rate).”

Manufacturing activity contracted for a fourth straight month in November. The factory malaise has been blamed on the Trump administration's 17-month trade war with China, which has bruised business confidence and undercut capital expenditure.

S&P 500 futureswere up 0.65%, while the 10-Year Treasury yield rose 6 basis points to 1.855%.

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