Expect strong job growth in November. In an extremely competitive labor market, employers are likely to continue to increase wages to keep workers.
Economic experts expect that 573,000 additional jobs will be created this month. That’s up from 531,000 in OctoberAccording to Dow Jones, it is. According to Dow Jones, the unemployment rate will have fallen to 4.5%, from 4.6%. The average hourly wage is forecast to have increased 0.4% monthly, which would be 5% more than last year.
It looks like it’s been a great month. With some pullback that is normal with concern about omicron, we will see if it can be sustained,” stated Diane Swonk chief economist at Grant Thornton. But at this moment we’re still reeling from what was an extraordinary month, particularly for travel and tourism.
Expected Friday morning at 8:30 am, the jobs data. ET will serve as an input to the Federal Reserve during its December 14 and 15, meeting. This was done earlier in the week. Fed Chairman Jerome Powell said the central bank could speed up the taperingIts $120 billion per month bond-buying programme, which was put into place in order to support the economy during the Pandemic. He stated that the Fed will be discussing acceleration at its December meeting.
Fed’s double mandate
The Fed believes that full employment is one of its goals dual mandatesEconomists will closely monitor the November report’s participation rate to determine if it increases. It is the percent of eligible workers who are employed or seeking work. In October, it was at 61.6%.
Swonk predicts 750,000 new jobs in November. The unemployment rate will drop to 4.4%. Swonk stated that wage growth is expected to be steady as employers try to recruit workers to meet the demand from Amazon or other employers who have increased wages.
She said, “It is a hot market for jobs and there is a surge of demand like nothing else we have ever seen.” According to an online job site, she noted that the number of available jobs has increased 55% over February 2020. Indeed.
There is no immigration. The world has fallen from a cliff. “The pandemic has caused retirements to accelerate and hurt participation within some groups that usually need it the most,” she stated. But it’s still not perfect. This is because there’s an unforeseen combination of increased demand and tighter supply in the jobs market.
In November, wage gains were expected across all sectors. Swonk stated that although there will be gains at the lower end of the scale, the high-end, which includes professional services, should see significant increases.
Luke Tilley (chief economist, Wilmington Trust) expects that 300,000.0 jobs will be created in November based upon private sector data as well as weekly unemployment claims data.
He believes that the trend in hiring will continue to be strong.
Tilley said that although we anticipate 500,000 jobs per monthly on average for the 12 months ahead, there are going to be fluctuations with viruses and changes in different industries.
More context for the jobs report
Tilley indicated that the Fed will examine reasons for the weakness of strength or weakness in the jobs report as it attempts to evaluate what normal labor market conditions will look like post-pandemic. According to Tilley, “If it is weak because there are still no labor supplies, then that’s very different than weakness due to demand petering out.” The FOMC and Fed are likely spending less time understanding what full labor market recovery means.
He stated that the Fed must adjust to a lower participation level. He said that this has consequences for the unemployment rate. It should even be compared to pre-pandemic rates.
Investors will be evaluating the employment report, as well as analyzing its implications for Fed policy. Any nuances that may help to determine when the central bank will complete its bond-buying program are being taken into consideration by financial markets. This is now expected to be completed in June 2022.
The Fed could raise its interest rates once the bond purchase ends.
Swonk has been expecting the Fed to speed up the tapering of its bond purchasesDue to higher inflation than anticipated, the wage section of the employment report is also very important. The Fed was concerned that we might experience a “wage price spiral” but she stated, “We aren’t getting one… but it is something the Fed fears.”
InspereX Senior Trader David Petrosinelli stated that the markets will likely not be affected by the employment report unless the data is extremely strong or weak.
He stated that he believes the market is more ready for a higher number and rates are still able to move. Petrosinelli highlighted the yield at 1.44% for the benchmark 10-year Treasury on Thursday afternoon. The yield moves in opposite direction to the price.
His reference to the 10-year yield was “You could look back at last week” and it was 1.70%. That was my opinion. You could get an even stronger number and we could easily go back to the upper bound, but with this additional variant.
Following initial Covid Covid reports, Yields fell sharply.
