U.S. jobs growth revived in November to 227,000 in the nonfarm payrolls report on Friday. That figure was near the average analyst estimate and a major leap from October’s storm-rattled weakness. Unemployment inched up to 4.2% from 4.1% previously, also close to expectations for unchanged.
The not-too-hot, not-too-cold nature of the November nonfarm payrolls release gave the Federal Reserve whatever remaining leeway it may have needed to cut interest rates this month. It’s very likely the Fed will cut rates by 25-basis point (0.25%) at its December 17-18 meeting. The only thing left on the docket that could dissuade the Fed is the release this week of separate reports on consumer and producer prices.
“The headline nonfarm payrolls gain of 227,000 was slightly above expectations, but the markets may be focusing more on the household survey that showed a net loss of 355,000, its second straight month of large job losses,” says Collin Martin of the Schwab Center for Financial Research. However, even with the unemployment rate ticking up amid a pullback in household employment, Jeff Cox of CNBC points out, “The jobs picture still looks solid if not spectacular. Payrolls still have not decreased in a single month since December 2020.”
It may feel like crosswinds all over the place with the economic data. While true, that’s nothing new to the markets or to us long-term investors. As always, it’s important to distinguish short-term financial news headlines from your long-term investing plan.
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