US traders will return to their terminals after what, for most, was a four-day weekend, to parse a series of top-tier macro releases culminating in the November jobs report due December 6.
Consensus is looking for a rebound from October’s hurricane-blighted NFP print, which was also distorted by work stoppages. Economists expect 200,000 from the new headline.
Naively assuming no revisions, an as-expected read would push the three-month average back up to 145,000.
Recall that jobless claims for NFP survey week were very low. The unemployment rate’s seen steady at 4.1% for November.
“In the October payrolls report, the headline figures were significantly distorted by the hurricanes [but] the UNR was not affected by the storms,” BMO’s Ian Lyngen and Vail Hartman reminded market participants, on the way to noting that on an unrounded basis, the jobless rate rose 0.094ppt in the last release.
“While the market was quick to downplay [that] stealthy uptick in unemployment and dismiss the report in its entirety, it nonetheless leaves the November UNR biased to tick higher,” BMO’s US rates team went on, adding that “with Sahm rule implications remaining topical as the hurricane impact clears from the BLS series, it will be relevant to see how the Unemployment Rate has weathered the storms.”
For what it’s worth, the real-time Sahm rule’s stilll hanging around the recession threshold, as illustrated above.
Of course, the jobless rate’s still very low on an absolute basis, and on that score hardly suggests the labor market’s close to any sort of cliff. The labor differential in the Conference Board’s survey improved again in November, the four-week moving average for initial claims sits at multi-month lows and my guess is that small business hiring sentiment will get a “Trump bump” over the next month or two.
Average hourly earnings in the jobs report are seen rising 0.3% MoM. That’s still a little on the warm side, particularly in the context of stubbornly elevated supercore inflation.
Job openings are seen relatively stable at 7.47 million in the JOLTS update, due Tuesday. Openings were the lowest since January of 2021 in the last release.
The figure shows you the job openings to unemployed ratio. It’s basically at 1.0, which is to say one open job for everyone counted as officially unemployed. For most of 2022 and part of 2023, this was one of the most important macro indicators on the board.
The quit rate in the same release has likewise normalized, and hires have receded, more ostensible evidence in support of Jerome Powell’s go-to talking point which says the labor market’s no longer a source of upside inflation risk in the US.
Speaking of Powell, he’ll take part in the New York Times DealBook Summit in New York on Wednesday. Other Fed officials with speaking engagements this week include John Williams, Chris Waller, Adriana Kugler and half a dozen others.
Also on the macro docket stateside: ISM manufacturing and services (expect another contraction-territory print from the former and a robust read on the latter consistent with “two-speed,” bifurcated US economy), ADP private hiring (headline seen at 158,000) and the preliminary read on University of Michigan sentiment for December (consensus is 73.3).
“[While] there has been much discussion regarding the potential for a strong labor market update to dissuade the FOMC from cutting at the December 18 meeting, we struggle to imagine such a policy inflection will be triggered by the employment market,” BMO’s Lyngen said, summing up. “That said, the narrative that neutral is higher than previously assumed would undoubtedly be reinforced by a stronger-than-expected payrolls print.”
