In this morning’s data, the economy added 64,000 jobs in November, more than expected. Note that the October payrolls report was delayed and the preliminary figure in today’s report indicates the economy may have lost -105,000 jobs in that month, likely impacted by the government shutdown. In November, the Construction industry and the Private Education and Health Services industry were relatively strong, while the Retail Trade industry was relatively weak. The Unemployment Rate came in at 4.6%, more than expected and the Labor Force Participation Rate was 62.5% for the month. Average Hourly Earnings increased 0.1% in November, less than expected, and grew 3.5% on an annual basis. In addition, Average Weekly Hours were 34.3, comparable to levels seen in previous months.
Meanwhile, headline Retail Sales for October were flat for the month, slightly less than expected. The Control Group, which is a closer measure of the inputs for GDP that excludes sales for food, autos, building materials, and gas stations, increased 0.8% in October, more than expected, and a nice rebound from the negative figure in the previous month.
Overall, a mixed picture for the labor market, with an increase in headline jobs in November following a preliminary weak October measure impacted by the government shutdown. The elevated unemployment rate is notable, as it has increased two tenths since September and is at the highest level this year. Strengths in payrolls were seen in construction as well as education and health services, but that was offset by weakness in the retail trade industry. Participation was near levels seen in previous months and while average hourly earnings increased slightly in November, the annual rate is a bit below the historical average. Additionally, the retail sales data show that consumers were reticent to spend, especially on automobiles as EV credits have expired. However, the control group rebounded from the previous month, which could bode well for GDP measures. The ability of the consumer to continue to spend amidst a labor market that has waned this year will be key for the economy in the coming months.
In all, the yield on the 10-year US Treasury initially ticked lower following the report but is now little changed and equity futures are lower as we head into the market open.
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