Market Overview

US Adds Just 245K Jobs In November, Missing Expectations By 44%

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US Adds Just 245K Jobs In November, Missing Expectations By 44%

On Friday, the Bureau of Labor Statistics released employment data for the month of November, and the numbers were disappointing.

Here’s a rundown of everything you need to know.

What You Need To Know About The Jobs Report: The nonfarm payroll number came in at +245,000, well worse than consensus economist expectations of +440,000.

The unemployment rate decreased 0.2% to 6.7%. Average hourly earnings were up less than 0.3% in the month to $29.58.

November’s job growth represents a sharp drop from the 610,000 jobs the economy gained in October.

Related Link: Dow Hits 30,000, But Does It Mean Anything?

The transportation and warehousing industry led the gains in November by adding 145,000 jobs, more than any other industry. The retail industry lost another 35,000 jobs in November and is now 550,000 jobs below its February level.

In addition to the disappointing November numbers, the Labor Department also revised its jobs growth estimates for the last two months as well. The Labor Department increased its September estimate by 39,000 jobs to +711,000 and decreased its October estimate by 28,000 jobs to +610,000.

Market Reaction To The Jobs Report: Brad McMillan, chief investment officer for Commonwealth Financial Network, said the jobs report was a disappointment and is an indication that the uptick in coronavirus cases may be having a larger economic impact than investors had realized.

“With the significant drop in private job creation, prospects for a continued strong recovery in consumer spending may be at risk. This is a wake up call for the Congress and should support more Federal stimulus,” McMillan said.

Joseph Brusuelas, chief economist at RSM US LLP, said further job growth will be difficult to come by until Americans are certainly a safe coronavirus vaccine is widely available.

"While we are outright bullish on growth and employment conditions in the second half of 2021 what is going to unfold over the next few months necessitates the targeting of fiscal aid at small service sector firms, replenishing unemployment insurance, strengthening eviction protections and forbearance measures as well as providing direct aid to state and local governments to prevent an increase in public sector unemployment," Brusuelas said.

Investors showed little initial reaction to the jobs numbers, with the SPDR S&P 500 ETF Trust (NYSE: SPY) trading up by just 0.1% in pre-market trading.

 

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