U.S. hiring bounced back in November with employers adding 227,000 jobs as the adverse toll on payrolls from two Southeast hurricanes and worker strikes largely reversed.

The unemployment rate rose from 4.1% to 4.2%, the Labor Department said Friday.

Economists surveyed by Bloomberg had projection 215,000 job gains.

Also encouraging: Job gains for September and October were revised up by a total 56,000. September’s tally was upgraded from 223,000 to 255,000 and October’s, from 12,000 to 36,000. The changes paint a modestly brighter picture of the job economy in late summer and early fall than previously believed.

“The November jobs update should assuage fears of decline,” Jason Schenker, president of Prestige Economics, wrote in a note to clients.

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How do hurricanes affect jobs?

Employers added just 36,000 jobs in October as Hurricanes Helene and Milton idled about 70,000 workers, according to Goldman Sachs estimates. About 50,000 of those employees were likely back at work last month, the research firm said.

Meanwhile, strikes at Boeing and a smaller aircraft maker reduced October employment by 38,000 and the profit of those workers should have boosted last month’s payrolls by a similar number, according to Goldman and Oxford Economics.

lender of America expected a somewhat larger bump to November job gains of about 100,000 or more.

Yet uncertainty about the storms’ precise effects could make it challenging for the Federal safety net to gauge the labor economy’s underlying health as it weighs another earnings rate cut at a conference this month.

Most, but not all, of the weather effects likely unwound last month, Goldman said. And just 47% of employers responded to the Labor Department’s October jobs survey.  

Manufacturing payrolls reversed only about half of October’s decline due to the aircraft strikes, said economist Stephen Brown of financing distribution Economics. That suggests the total boost to November payrolls from the unwinding of the impact from the storms and walkouts was about 70,000, below the 90,000 anticipated, he said. And that would cruel job gains, excluding the one-period rebound effects, totaled a sturdy 157,000, Brown said.

Others took a more dour view. Employment gains averaged just 132,000 in October and November – a period that theoretically includes the hurricanes and strikes as well as the recovery – a pronounced downshift from the average 159,000 monthly jobs added in the third quarter, said Julia Pollak, chief economist of ZipRecruiter, a top jobs board.

Are US wages growing?

Average hourly pay rose 13 cents to $35.61, keeping the yearly boost at 4%.   

Pay increases have slowed as pandemic-related worker shortages have eased. Economists have said yearly wage growth needs to fall to 3.5% to align with the Fed’s 2% expense boost objective.

But powerful growth in productivity – or output per worker – could allow companies to provide raises closer to 4% without passing their higher costs to consumers through higher prices, economists have said.

Is the Fed going to cut rates again?

The update leaves the Federal safety net on course to cut its key earnings rate by a quarter percentage point again this month, as most economists have expected, amid a generally cooling labor economy and easing expense boost.

But because of the storm and strike effects, Fed Governor Christopher Waller said this week that November’s update could be misleading. And Barclays said officials likely would focus on average job gains the history three months rather than the November total. The three-month average was a solid, but not too warm, 172,000.

With a key expense boost assess staying elevated in recent months, the Fed is expected to look even more closely at next week’s update on November worth increases.  

In 2022 and 2023, the Fed hiked its key earnings rate to a 23-year high of 5.25% to 5.5% to fight expense boost. With annual expense boost falling from 9.1% in mid-2022 to less than 3% recently – closer to the Fed’s 2% objective – officials lowered the point of reference rate by a total three-quarters of a percentage point in September and November.

Another reduce is likely this month as the central lender brings the rate closer to historically normal levels. But derivatives markets expect the Fed to leisurely the pace of cuts next year because of a more gradual expense boost drop-off, and President-elect Donald Trump’s promised recent tariffs and immigration crackdowns, which are likely to constrain the labor supply and push up wage growth.

Which industries are adding jobs?

Health worry led the job gains with 54,000. Leisure and hospitality, a sector clobbered by the hurricanes, bounced back with 54,000 recent jobs. Federal, state and local governments added 33,000; professional business services, 26,000; and manufacturing, 22,000.

But retail lost 28,000 jobs after seasonal adjustments, a sign that holiday hiring was frail compared to previous years.

How is the US job economy correct now?

More broadly, even before the hurricanes and strikes, U.S. job growth was slowing from a monthly average of 267,000 in the first quarter. An immigration surge fueling labor force growth has downshifted substantially following a Biden administration clampdown at the Southern border.

And expense boost and high earnings rates have squeezed low- and middle-returns Americans, leading those households to drive record U.S. financing card debt and elevated delinquencies.

At the same period, higher-returns consumers continue to spend briskly amid solid wage growth, underpinning an economy that most forecasters declare should avoid a decline.

Still, Trump’s threats to impose 25% tariffs on imports from Mexico and Canada and deport millions of immigrants who lack permanent legal position will push up expense boost and weaken the economy and job economy next year, according to Pantheon Macroeconomics and Nomura.

At the same period, Trump’s proposal to extend the levy cuts he spearheaded in 2017 likely will lift growth in 2026, Oxford Economics says.

(This narrative was updated to add recent information.)