A pedestrian walks past a “Hiring Now” sign in front of a U-Haul store on December 3, 2024 in San Rafael, California.
Justin Sullivan | Getty Images
After a month of hiring largely stalled by storms and strikes, Friday’s jobs report could provide a clearer picture of where the labor market is headed.
The U.S. Bureau of Labor Statistics is expected to report at 8:30 a.m. ET on Friday that nonfarm payroll employment increased by 214,000 in November, a sharp increase from the same period last year. A meager 12,000 gain in October. The month’s job growth data was the worst since December 2020.
One of the reasons that makes the report so critical is that it will be the last comprehensive report the Fed gets before its next policy meeting on Dec. 17-18. The market is betting heavily on The Fed will approve Another quarter-percentage point rate cut, but that could change based on changes in employment.
“Well, it should be a pretty healthy number because it should bounce back from (October), when we had (Hurricane) Milton and the (Boeing strike),” said Casey Jones, chief fixed income strategist at the Schwab Center ) limits jobs ” for financial research.
In fact, the October numbers are likely to be higher after BLS investigators go back and re-examine the October data. Salary Report Revisions Sometimes on a grand scale in the post-Covid world.
That could muddy months of economic data and make the Fed’s job more challenging.
“I would expect it to go over 200,000, and if we do rebound, the risk could go up,” Jones said. “But I’m also not sure that this jobs report tells us much, because the weather’s effects come and go. Does it really give us a clear view of the future, or does it just give us a more detailed view of the future? More understanding? “Confusing data to deal with?” “
important to the fed
Now, policymakers want clarity from the Fed Readjust policies There is growing concern about the labor market at a time when annual inflation is rising but moderating.
Aside from the October report, employment has been slowing since around April, with an average of about 128,000 new jobs being added each month, while the unemployment rate has risen to 4.1%. Federal Reserve policymakers want to lower their benchmark short-term borrowing rate to a more neutral level to balance concerns between inflation and employment.
“It’s definitely going to be noisy because the storms and strike disruptions will impact both months of data, both the month people were off the job and when people returned to work the next month,” said Vincent, an economist at the Bank of New York. Reinha Special is a former Federal Reserve official who served at the Federal Reserve for 24 years.
He added: “The Fed believes that slowing non-farm job growth in 2024 is basically a trend – the trend is towards just over 100,000 job creation per month – and that is not alarming.” “It’s actually not concerning. It’s popular because, you know, the trend is sustainable.”
In fact, recent signals suggest the job market is stabilizing but not worsening.
labor market conditions
Weekly initial jobless claims have remained fairly steady around 220,000, although continuing claims in early November reached their highest level in about three years. Taken together, these numbers suggest that companies are not laying off large-scale layoffs or rehiring those who lost their jobs.
An economic report released by the Federal Reserve on Wednesday – its “Beige Book” summary of current conditions – described hiring as “subdued as worker turnover remains low and few companies report adding headcount.” . The report said the layoff rate was “low,” but employers were cautious about the pace of future hiring and more enthusiastic about entry-level and skilled workers.
Increase in job vacancies Hiring fell in October and voluntary separations increased, according to data from the Bureau of Labor Statistics this week.
The Fed must weigh all of these factors, plus concerns about rising inflation, when making interest rate decisions and laying out its outlook for the future.
Reinhart said if the labor market can remain stable, it should not put additional pressure on inflation. “So the strategy is, try to keep demand on trend, because if growth and demand are on trend, then you should keep the current state of the labor market, the labor market roughly in balance,” he added.
In addition to overall employment growth, the unemployment rate is expected to rise to 4.2% as workers begin to re-enter the labor market in October. In addition, average hourly wages are expected to increase by 0.3% month-on-month and 3.9% year-on-year, both slightly lower than last month.
