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US employers kept hiring briskly in November despite high inflation and a slow-growing economy.

The economy added 263,000 jobs, while the unemployment rate stayed 3.7 per cent,  which is near a 53-year low, the Labor Department said Friday. 

The November’s job growth dipped slightly from the 284,000 jobs added in October.

Even though inflation has surged and the Fed has imposed higher borrowing rates, US labor market has added thousands of jobs, month after month.

In November, average hourly pay jumped 5.1 per cent compared to year ago.

Fed Chair Jerome Powell said that jobs and wages were growing too fast for the central bank to quickly slow inflation. The Fed has jacked up its benchmark rate, from near zero in March to nearly 4 per cent, to try to wrestle inflation back toward its 2 per cent annual target.

The steady hiring and rising paychecks have helped US households as in October consumer spending rose at healthy pace after adjusting for inflation.

After having contracted in the first six months of the year, the US economy expanded at a brisk 2.9 per cent annual rate last quarter. In addition to strength from consumer spending, a spike in exports helped boost growth.

Though steady hiring and rising wages have fueled their spending, Americans are also turning increasingly to credit cards to keep up with higher prices. Many are also digging into savings, a trend that cannot continue indefinitely.

Some signs of weakness have sparked concerns about a likely recession next year, in part because many fear that the Fed’s surging rate hikes will end up derailing the economy. 

In addition to job cuts from tech behemoths like Amazon, Meta and Twitter, smaller companies — including DoorDash, the real estate firm Redfin and the retailers Best Buy and the Gap — have said they will lay off workers.

In November, a measure of factory activity dropped to a level that suggested that the manufacturing sector is contracting for the first time since May 2020.

(with inputs from AP)

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