The U.S. Economy Created 199,000 Jobs in November, up from 150,000 in October… The unemployment rate dipped from 3.9% to 3.7%.
What it means— Investors are scratching their heads to make sense of the latest jobs numbers. If unemployment falls and the economy creates more jobs, then the Fed might raise rates again before pivoting and lowering rates. That calls for selling equities and bonds. But maybe it’s just because the auto workers ended their strike. Maybe, or maybe not. So far, we’ve not had economic numbers that will put the Fed clearly on the path to lower rates, which is exactly what Chair Powell said after the last monetary policy meeting. Average hourly earnings jumped 0.4% last month and 4.0% for the year, higher than inflation. This shouldn’t lead to wage-push inflation, but it doesn’t show weakness in the labor market.
Initial Jobless Claims and Continuing Claims Still Hovering Around 220,000 and 1.8 Million, Respectively…
What it means— Initial jobless claims are sitting in a no man’s land, indicating neither growth nor contraction. But continuing claims are another story. With less than two million people claiming benefits past the first week of jobless claims, we still have a robust labor market. The number of job openings per unemployed worker fell from 1.5 to 1.3—or from 9.4 million openings to “just” 8.7 million. If you’re old enough you might remember when we rarely had more openings than unemployed workers, much less millions more. We first hit that mark in February 2018 and had more jobs than people looking for them for the rest of that year and for 2019. The pandemic changed that, but not for long. By May 2021, we were back to having more jobs than workers. It’s as if a bunch of people (cough, Boomers, cough) were leaving the workforce at the same time that we poured in trillions of dollars of stimulus money. The extra cash will end, but Boomers will keep on retiring.
Consumer Credit Grew 0.7% in October, Down From 2.5% in September… Things were ugly in October, as the 30-year mortgage rate reached 8% and some credit card rates hit 30%. It seems like eons ago that the 10-year Treasury yield kissed 5% (4.98%). Things are different now. The 10-year is a mere 4.22% and mortgage lenders are offering loans at 7.6%.
Retailers report that Black Friday and Cyber Monday weren’t great but weren’t terrible, either. This adds more uncertainty for the central bankers, as they try to figure out what consumers will do next: ratchet down their spending or burn the credit cards? With the S&P 500 closing in on its all-time high, it looks like investors have made up their minds.
Infamous New York Jail, Rikers Island, Forced to Close Arson Housing Unit Because It Lacked Fire Monitors… In a move that defies logic, authorities running the jail decided to put all the suspected arsonists in one unit. But they had to close the unit after just one day, when an inspector found it had no fire prevention equipment. Befitting the comical situation, the federal inspector is named Steve Martin. There’s no word if he has ever used the name Inspector Clouseau…
Data supplied by HS Dent Research
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