The November jobs report is set for release Friday morning and is expected to show a reacceleration in job growth after worker strikes impacted the October report.
The monthly labor report from the Bureau of Labor Statistics, set for release at 8:30 a.m. ET, is expected to show nonfarm payrolls rose by 185,000 in November while the unemployment rate remained flat at 3.9% from the previous month, according to consensus estimates compiled by Bloomberg. In October, the US economy added 150,000 jobs while unemployment ticked up to 3.9%.
Here are the key numbers Wall Street will be looking at, according to data from Bloomberg:
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Nonfarm payrolls: +185,000 vs. +150,000 previously
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Unemployment rate: 3.9% vs. 3.9% previously
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Average hourly earnings, month-on-month: +0.3% vs. +0.2% previously
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Average hourly earnings, year-on-year: +4.0% vs. +4.1% previously
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Average weekly hours worked: 34.4 vs. 34.4 previously
The report will serve as a test for the stock market. Investors are betting the Federal Reserve is done hiking interest rates and are widely expecting rate cuts in 2024. Much of that thesis is based on the labor market normalizing from its pandemic boom and inflation slowing. If the report helps reinforce that narrative, it could lift equities.
"We expect the November employment report to show an acceleration in job growth, driven by the return of striking UAW and SAG-AFTRA workers," said Oxford Economics lead US economist Nancy Vanden Houten. "Excluding those workers, job growth will still be relatively robust, although narrowly based. Looking through strike-related noise, we expect the jobs report to be consistent with softening labor market conditions, allowing the Fed to forego more rate increases."
Recent data this week showed signs of cooling in the labor market. On Tuesday, the latest Job Openings and Labor Turnover Survey, or JOLTS report, revealed the ratio of job openings to the number of unemployed workers fell to 1.34, its lowest reading since August 2021.
To Vanden Houten, the decline showed a labor market coming into "a better balance" between supply and demand, as the Federal Reserve has referenced.
"Labor market conditions remain very strong, and the economy is returning to a better balance between the demand for and supply of workers," Fed Chair Jerome Powell said in a speech on Dec. 1. "The pace at which the economy is creating new jobs remains strong and has been slowing toward a more sustainable level."
Additional labor market data out Wednesday from ADP showed private payrolls increased more slowly than expected last month and wages continued to fall. Specifically, ADP noted that the drop in leisure and hospitality jobs in November could be a sign of the labor market normalizing, and therefore payroll growth could eventually slow next year.
“Restaurants and hotels were the biggest job creators during the post-pandemic recovery,” said Nela Richardson, chief economist at ADP. “But that boost is behind us, and the return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.”
Josh Schafer is a reporter for Yahoo Finance.
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December 08, 2023 at 04:32AM
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