The Bureau of Labor Statistics is set to release its nonfarm payrolls report for November on Friday, with analysts expecting a significant increase in job gains after a muted October. The data will provide the Federal Reserve with crucial insight before its next policy meeting on December 17-18.
The report’s significance lies in its potential impact on the Fed’s decision-making process. Markets predict another quarter-percentage-point interest rate cut, but this could change if the jobs number surprises to the upside. Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research, expects a “healthy” number and anticipates a rebound from October’s low reading.
However, the post-Covid period has seen massive revisions to payrolls reports, which may add complexity to the data. Vincent Reinhart, a former Fed official, notes that the jobs picture has been showing a mostly slower trend since April, with payroll gains averaging about 128,000 new jobs per month. The Fed wants to balance its focus between inflation and employment by recalibrating policy.
The labor market is expected to be steady, not worsening, with initial weekly unemployment insurance claims holding in a steady range around 220,000. Job openings increased in October, while the hiring rate fell, and those leaving their jobs voluntarily increased.
The Fed’s strategy aims to preserve the current state of the labor market by getting demand at trend. A steady labor market should not put additional pressure on inflation, Reinhart said. The unemployment rate is expected to nudge up to 4.2%, while average hourly earnings are predicted to rise 0.3% on the month and 3.9% from a year ago.
Source: https://www.cnbc.com/2024/12/05/theres-an-important-jobs-report-coming-friday-heres-what-to-expect.html