In this morning’s data, the economy added 199,000 jobs in November, more than expected. The Health Care and Social Assistance industry was relatively strong while the Retail Trade industry and Temporary Help were both relatively weak. The Unemployment Rate surprisingly fell two-tenths to 3.7%, and the Labor Force Participation Rate at 62.8% is one-tenth higher than the previous month. Average Hourly Earnings increased 0.4% in November, higher than expected, and grew 4.0% on an annual basis. In addition, Average Weekly Hours were 34.4, which is one-tenth higher than the previous month.
Overall, jobs increased in November more than expected and at a higher level than the previous month as we moved past the labor strikes in the auto industry. Meanwhile, the unemployment rate fell by two-tenths, denoting strength in the labor market after exhibiting some softness last month. In addition, wages ticked higher in November, but the annual increase is right near historical averages. Given these data, the Federal Reserve is likely to keep rates at current levels until additional weakness hits the labor market with a rise in the unemployment rate or core inflation measures progress further toward their 2% annual goal. Market participants will be closely watching the decision and commentary following the Fed’s meeting next week to assess whether their policy may further slow the economy in the months ahead. Amidst this environment, how well consumer spending and company earnings can hold up will be key for the markets.
Following the release of the jobs report, the yield on the U.S. 10-year treasury moves higher and equity futures are lower as we head into the market open.
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