Due to the impact of recent devastating hurricanes and ongoing strikes, U.S. job growth in November rebounded and exceeded expectations after nearly stagnating the previous month.
In November, the U.S. seasonally adjusted non-farm payrolls increased by 227,000, the largest increase since March 2024, exceeding the expected 200,000, with the previous value revised from 12,000 to 36,000. The unemployment rate in the U.S. for November recorded at 4.2%, in line with expectations, with the previous value being 4.10%. The average hourly wage in the U.S. in November grew by 0.4% month-on-month, higher than the expected 0.3%, consistent with the previous value; year-on-year growth was 4%, exceeding the expected 3.9%, also consistent with the previous value.
After the release of non-farm data, U.S. short-term interest rate futures rose as traders bet on an increased likelihood of a Federal Reserve rate cut. Traders now believe there is an 85% chance of a Federal Reserve rate cut in December, up from 67% before the employment report was released.
The dollar index fell 25 points in the short term. Spot gold rose by $7 in the short term, briefly recovering the $2640 mark. Non-dollar currencies generally strengthened, with the euro breaking above 1.06 against the dollar; the dollar's decline against the Swiss franc expanded to 0.5% during the day; the pound rose nearly 30 points against the dollar in the short term.
The U.S. Bureau of Labor Statistics stated that employment in industries such as healthcare, leisure and hospitality, government, and social assistance is on the rise, while retail employment has decreased.
The significant rebound in jobs created in the U.S. in November compared to the previous month is mainly due to the drag from hurricanes and the Boeing strike on the readings in October. Market participants have generally anticipated that November's data would exceed the basic trend.
Institutional analysis indicates that non-farm employment growth is almost in line with targets. However, the average hourly wage month-on-month growth appears strong at 0.4%, exceeding expectations. Moreover, the rise in the unemployment rate is not a good sign, especially in the context of a declining labor force participation rate.
Analysts say, at first glance of this report, we do not see signs of an economic recession. The job market has not hit rock bottom, but there are indeed signs of a slowdown. Given the Federal Reserve's benchmark interest rate, with an upper limit of 4.75%, which is more than a percentage point higher than the core inflation rate, the justification for further rate cuts still stands.
The non-farm employment report is one of the last major data sets the Federal Reserve will consider before deciding whether to cut rates for the third consecutive time in its December meeting. Federal Reserve Chairman Powell stated this week that the Fed can be 'a bit more cautious' on rate cuts because the U.S. economy is 'doing very well' and inflation levels are slightly higher than previously expected.
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Article forwarded from: Jinshi Data