Briefing.com: Nonfarm Payrolls

Updated: 06-Dec-24 09:38 ET

November Nonfarm Payrolls

Updated: 06-Dec-24 09:38 ET

Highlights

The November employment report revealed a recovery in nonfarm payrolls following a swoon in October that was unduly impacted by the effects of the hurricanes and the Boeing machinists strike. It also showed an uptick in the unemployment rate.

Key Factors

November nonfarm payrolls increased by 227,000 (Briefing.com consensus 200,000). The 3-month average for total nonfarm payrolls increased to 173,000 from 123,000. October nonfarm payrolls revised to 36,000 from 12,000. September nonfarm payrolls revised to 255,000 from 223,000.
November private sector payrolls increased by 194,000 (Briefing.com consensus 200,000). October private sector payrolls revised to -2,000 from -28,000. September private sector payrolls revised to 222,000 from 192,000.
November unemployment rate was 4.2% (Briefing.com consensus 4.2%), versus 4.1% in October. Persons unemployed for 27 weeks or more accounted for 23.2% of the unemployed versus 22.9% in October. The U6 unemployment rate, which accounts for unemployed and underemployed workers, increased to 7.8% from 7.7%.
November average hourly earnings were up 0.4% (Briefing.com consensus 0.3%) versus 0.4% in October. Over the last 12 months, average hourly earnings have risen 4.0%, versus 4.0% for the 12 months ending in October.
The average workweek in November was 34.3 hours (Briefing.com consensus 34.3), versus 34.2 hours in October. Manufacturing workweek was little changed at 40.0 hours. Factory overtime increased 0.1 hour to 2.9 hours.
The labor force participation rate decreased to 62.5% from 62.6%.
The employment-population ratio fell to 59.8% from 60.0%.

Big Picture

The key takeaway from the report is that it has satisfied the market's December rate cut curiosity in the sense that it gives the Fed cover, absent what we may see in next week's CPI and PPI reports, to cut the target range for the fed funds rate by another 25 basis points at the December FOMC meeting.
There will be a debate as to whether the Fed should cut rates with core inflation still above the 2.0% target, the wealth effect in full force with home equity values soaring and the stock market (and Bitcoin) at record highs, and Q4 GDP tracking above 3.0%, according to the Atlanta Fed GDPNow model. We're only saying that a Fed sounding more like it wants to cut again in December can cherry pick from the latest report to rationalize a rate cut decision. Where it will do the cherry picking is in the U3 unemployment rate, the U6 unemployment rate, and the drop in the labor force participation rate.