Friday, December 6, 2024

It’s finally here: the non-farm payroll Employment Report for November, from the U.S. Bureau of Labor Statistics (BLS). Headline 227K new jobs filled last month came slightly ahead of the 214K analysts were expecting. Everyone expected a bounce-back from a strike-and-hurricane-ravaged October headline, which itself was upwardly revised to 36K. The Unemployment Rate , also unsurprisingly, ticked up to 4.2%.

This is warmer than many observers — including those in the Fed, most particularly Chair Jerome Powell — had been expecting by this time of the year. Long was the belief — with about a year and a half of an inverted 2-year/10-year bond yield curve, which was a sure red flag — that a recession was on the way, if not by mid-2024 than certainly by the end of it. But the economy is proving far more resilient than that.

Average Hourly Earnings rose 10 basis points (bps) to +0.4%, the highest rate since we saw a +0.5% way back in January. This is another notch for a more-robust labor market. Year over year, +4.0% is steady, not coming down. And the Labor Force Participation Rate and the Average Workweek came down. The U-6 segment, aka “real unemployment,” reached +7.8%, the highest since August.

We had heard reports on low holiday retail hiring so far this season, but those numbers wouldn’t likely show up until December BLS numbers. That said, to whatever extent that may have been part of the narrative in the current report, may have been a subtle headwind against an already-strong 227K new jobs created last month.

What Do Today’s Jobs Numbers Mean for Fed & Interest Rates?