This looks like an incredibly bullish report at first glance. No, you’re not reading that incorrectly. The U.S. economy lost just 11,000 jobs in November and unemployment fell to 10%.
Update 1 – For the first time in years the dollar is rising with stocks as traders anticipate higher interest rates. It will be very interesting to see if the equity markets can hang onto gains as the rate hike outlook will almost certainly come into play earlier than most expect, based on today’s report….From Econoday:
Traders did not need their second cup of coffee this morning as they were jolted by a sharply better than expected jobs report for November. Nonfarm payroll employment in November edged down only 11,000, following a revised decline of 111,000 in October and a revised decrease of 139,000 in September. As suggested by recently lower initial jobless claims, the November contraction in payroll employment was far better than the market forecast for a 100,000 decrease. Job losses in the construction, manufacturing, and information industries were offset by job gains in temporary help services and health care.
From the household survey, the unemployment rate fell back to 10.0 percent from 10.2 percent in October. The consensus had projected no change at 10.2 percent.
Wage inflation eased as average hourly earnings in November edged up 0.1 percent, following a 0.3 percent boost the prior month. The market had forecast a 0.2 percent gain. The average workweek points to pending improvement in hiring as the workweek rose to 33.2 hours in November from 33.0 hours in October and topping the consensus forecast for 33.1 hours. Employers typically boost the workweek before adding to their workforce during recovery.
Today’s report is good news for workers and employers alike. And even retailers could benefit if confidence is boosted and consumer decide to spend a bit more. Equity futures surged on the news while Treasury rates firmed.
The full report is here. More to come….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.