2024-12-11
The November nonfarm payrolls report shows a significant rebound,
reflecting recovery from October's temporary disruptions caused by storms and
labor strikes.
The November 2024 U.S. jobs report showed a solid recovery with 227,000 jobs added especially in healthcare, leisure & hospitality, government sectors.
Robust Job Growth:
o 227,000 jobs
added, exceeding expectations.
o Significant upward revisions for October (36,000 from 12,000) and September (255,000 from 223,000), yielding a three-month average of 173,000.
Sector Contributions:
o Healthcare: +54,000 jobs.
o Leisure &
Hospitality: +53,000 jobs.
o Government: +33,000 jobs.
o Transportation
Equipment Manufacturing: +32,000 jobs, rebounding post-strike.
o Social
Assistance: +19,000 jobs.
o Retail Trade: -28,000 jobs, reflecting delayed holiday hiring.
Wage Growth:
o Average hourly
earnings rose 4% year-over-year, with a 0.4% month-over-month
increase. This sticky wage growth supports consumer spending but poses
challenges for inflation control.
Unemployment & Participation:
o Unemployment
ticked up to 4.2% (from 4.1%), remaining above pre-pandemic lows.
o Labor force
participation dipped slightly to 62.5%.
Implications for the Federal Reserve
A December rate cut of 25 basis points appears likely, followed by four
additional cuts in 2025 at alternate meetings.
Wage growth, while supportive of consumer confidence, is not
expected to derail the Fed's trajectory toward a neutral policy stance.
The Fed’s dual mandate of maximum employment and stable prices
remains balanced, with the labor market robust despite slight upticks in
unemployment.
Investment Implications
Sectors benefiting from labor market strength (e.g., healthcare and
services) could present investment opportunities.
Sticky wage growth suggests resilient consumer sectors may continue
to thrive.
