Nonfarm payrolls increase 263,000 in November
Unemployment rate steady at 3.7; participation rate falls
Average hourly earnings rise 0.6; up 5.1 yearonyear

WASHINGTON, Dec 2 Reuters U.S. employers hired more workers than expected in November and increased wages despite mounting worries of a recession, but that will probably not stop the Federal Reserve from slowing the pace of its interest rate hikes starting this month.

The Labor Department39;s closely watched employment report on Friday also showed about 186,000 people left the labor force last month, keeping the unemployment rate steady at 3.7. Labor market tightness and strength keeps the Fed on its monetary policy tightening path at least through the first half of 2023.

Fed Chair Jerome Powell said on Wednesday the U.S. central bank could scale back the pace of its rate increases as soon as December. Fed officials meet on Dec. 13 and 14.

The Fed has more work to do and we look for further 50 basis points rate hikes in December and in February, with the potential for tightening needing to go on for longer, said James Knightley, chief international economist at ING in New York.

Nonfarm payrolls increased by 263,000 jobs last month. Data for October was revised higher to show payrolls rising 284,000 instead of 261,000 as previously reported.

Economists polled by Reuters had forecast payrolls increasing 200,000. Estimates ranged from 133,000 to 270,000. Employment growth has averaged 392,000 per month this…