U.S. adds 199,000 jobs and unemployment falls, signaling a still-sturdy labour market

U.S. employers added a solid 199,000 jobs last month and the unemployment rate fell, fresh signs that the economy could achieve an elusive 'soft landing,' in which inflation would return to the Federal Reserve’s two per cent target without causing a steep recession.

Friday’s report from the Labor Department showed that the unemployment rate dropped from 3.9 per cent to 3.7 per cent, not far above a five-decade low of 3.4 per cent in April. The unemployment rate has now remained below four per cent for 22 straight months, the longest such streak since the late 1960s.

November's job gain was a reminder that many employers continue to hire, though last month’s increase was inflated by the return of about 40,000 formerly striking auto workers and actors, who were not at work in October but returned in November.

The jobs report and other recent data portray an economy and a labour market that, while still sturdy, are downshifting back to pre-pandemic norms. Businesses are still hiring but are less desperate to fill jobs. More Americans either have a job or are looking for one. As a result, employers are having an easier time hiring, with less pressure to rapidly raise pay, which can fuel inflation.