The news just hit the airwaves and it continues to look good for mainstreet. Wall Street was coming into this report upbeat expecting Fed policy to finally be represented in the data, however, what was released is contrary to that fact. Here is your 9Innings Capital Economic News release...
Total non-farm payrolls beat expectations and rose by 263k in November and the unemployment rate remained unchanged at 3.7%. Job gains occurred in leisure and hositality, health care, and government while declines were felt in the retail trade, transportation and warehousing sectors.
The number of unemployed persons was essentially unchanged at 6 million in November. Previous data has shown there to be roughly 10 Million jobs available per 6 Million unemployed. That equates to 1.67 jobs per unemployed person in the U.S.
Unemployment rates per demographic showed little change. Blacks were at 5.7% and whites at 3.2%, while Asians were at 2.7% and Hispanics sat at 3.9%.
The number of long-term unemployed (those jobless for 27 weeks or longer) remained at 1.2 million in November which makes up 20% of all unemployed individuals. An interesting fact remains that persons not in the labor force who currently want a job was at 5.6 million, and remains above its February 2020 level of 5 million. This is telling because it remains higher than the pre-pandemic February level. Another interesting fact about those not in the "labor force", these individuals are classified as wanting a job, but are not actively looking for work during the 4 weeks preceding the survey.
September payrolls were revised down (-46000) to +269,000 and October was revised up (23000) to +284,000. With these revisions, employment gains in September and October combined were (-23,000) lower than what was reported.
Average hourly earnings remain a very important measurement and provides direction on how the Fed may react to this report. Wages are one of the stickiest components to inflation and average hourly earnings over the past 12-months have increased by 5.1%. Key point in this data, the work week is becoming shorter and pay is increasing as the average workweek declined across private nonfarm payrolls, manufacturing and nonsupervisory employees.
Retail is very telling at this time. Job losses of 32k in general merchandise stores, coupled with electronics furniture and appliances losing another 7k jobs, shows me that consumption may be slowing. The U.S is GDP is made up of +70% consumption, so if youa re beginning to see layoffs in certain retail segments, that can be a precursor into what is to come.
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