Following last month’s election of Donald Trump, the US job market showed significant recovery as employers ramped up hiring after being impacted by hurricanes and industrial actions.

The US payroll report indicated an addition of 227,000 jobs in November, surpassing the anticipated 200,000 and marking a notable increase from the dismal 36,000 jobs created in October, which was severely affected by natural disasters and strikes at Boeing. The previously reported figure for October was revised upwards from an initial estimate of 12,000, making it the weakest month since late 2020 when widespread lockdowns were in effect.

The unemployment rate saw a slight uptick from 4.1% to 4.2%, while average weekly earnings remained unchanged, increasing by 0.4%, as reported by the US Bureau of Labor Statistics.

This employment data is the first to be disclosed following the recent presidential election, which saw the Republican party secure the White House as well as majorities in both the House of Representatives and the Senate.

Investors responded positively to the election results, pushing US stock prices to new heights in anticipation of potential tax reductions and deregulation promised by Trump, who is set to assume office on January 20.

November’s employment figures come just before the Federal Reserve’s final interest rate decision for the year scheduled for December 18. Following the jobs report, market expectations for a 25 basis point rate cut this month rose considerably, increasing from 70% to 88%. A reduction would lower US borrowing costs to a target range of 4.25% to 4.5%.

In reaction to the employment data, the dollar appreciated by 0.2% against a range of foreign currencies, while US bonds experienced slight gains. Yields on the 10-year Treasury bonds fell 0.01 percentage points and 0.03 points on the two-year bonds, as bond prices increased with falling yields. Stocks on the S&P 500 index experienced a rise of 0.12% during Friday’s trading session.

Richard Flynn, managing director at Charles Schwab, remarked that the robust job growth might influence the Federal Reserve to maintain current interest rates in December. He noted, “While the future remains uncertain, the current macroeconomic environment appears optimistic, and market sentiment seems buoyant. It’s challenging to find any significant negative indicators apart from possible overvaluation issues.”

Government employment increased by 33,000 positions last month, and the private sector contributed to the creation of 194,000 jobs, including 22,000 in manufacturing. The Bureau of Labor Statistics highlighted job gains in healthcare, leisure and hospitality, government services, and social assistance, while the retail industry encountered job losses.

Before the jobs data was released, Max McKechnie from JP Morgan Asset Management stated that stronger-than-expected job numbers could undermine the optimistic forecast for interest rates laid out by the Fed during its September meeting, when the central bank had projected eight rate cuts through the end of 2026.

He added that recent communications from the Fed have emphasized keeping all options open for December, indicating that the decision is still highly contested. “Revisions to the Fed’s expected trajectory for interest rates in the coming year are virtually assured,” he concluded.