The strong U.S. labor market finally appears to be simmering down after a long stretch of rapid hiring. Here’s what to watch for in the November jobs report due Friday morning. The forecast The U.S is expected to add solid 190,000 jobs in November following a 150,000 gain in the prior month, according to economists polled by the Wall Street Journal.
Why an increase, if the economy is slowing? The return of striking Hollywood and United Auto Union workers will add up to 50,000 jobs to the headline number. And government employment has been risen sharply. Such an increase would fall below the 239,000 average monthly gain so far this year, but it would still be too fast for the Federal Reserve. Fed Chair Jerome Powell and his colleagues want to see demand for workers ease to about 100,000 jobs a month, representing the typical growth of the labor force. Anything higher could put upward pressure on worker pay and add to inflation. Other labor market indicators, such as the ADP jobs report and U.S. job openings, have suggested hiring has slowed.Market reaction The S&P 500
SPX
has rallied around 5% and the yield on the 10-year Treasury note
BX:TMUBMUSD10Y
has fallen from around 4.6% to 4.15% since the last jobs report on rising expectations for a series of rate cuts in 2024. Yields and debt prices move opposite each other. As a result, market participants will be much more sensitive to a hotter-than-expected number than to a softer-than-expected figure, said Tom Essaye, founder of Sevens Report Research, in a Thursday note. That means the threshold for “too hot” figures — including payrolls, the unemploym …
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Why an increase, if the economy is slowing? The return of striking Hollywood and United Auto Union workers will add up to 50,000 jobs to the headline number. And government employment has been risen sharply. Such an increase would fall below the 239,000 average monthly gain so far this year, but it would still be too fast for the Federal Reserve. Fed Chair Jerome Powell and his colleagues want to see demand for workers ease to about 100,000 jobs a month, representing the typical growth of the labor force. Anything higher could put upward pressure on worker pay and add to inflation. Other labor market indicators, such as the ADP jobs report and U.S. job openings, have suggested hiring has slowed.Market reaction The S&P 500
SPX
has rallied around 5% and the yield on the 10-year Treasury note
BX:TMUBMUSD10Y
has fallen from around 4.6% to 4.15% since the last jobs report on rising expectations for a series of rate cuts in 2024. Yields and debt prices move opposite each other. As a result, market participants will be much more sensitive to a hotter-than-expected number than to a softer-than-expected figure, said Tom Essaye, founder of Sevens Report Research, in a Thursday note. That means the threshold for “too hot” figures — including payrolls, the unemploym …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]