The number of unemployed declined to 341,000 in November, which means that the unemployment rate dropped back to 5.6%. This result is fully in line with our expectations. The lower number of unemployed was influenced by economic growth, which is above potential, and the cyclical component of the unemployment picture, which is also favorable at this time of year. The cyclical effect is caused by the tapering off of the recent graduates entering the job market, which typically fades in November. For the first time this year, the number of job openings has decreased. This seasonal characteristic regularly repeats itself at the end of the year.
November should be the last month in which the unemployment rate moves down rapidly. The number of unemployed should moderately increase in December and the unemployment rate should move up to around 6% next year. The job market faces limits. The return of the economic growth rate back to its longer term potential growth rate will result in slower job creation.