Markets Jump On Blowout November Jobs Report, Unemployment Dips Lower

The Bureau of Labor Statistics released employment data for the month of November, and the jobs report came in well above expectations. 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 +266,000, above consensus economist expectations of +187,000.

The unemployment rate dropped from 3.6% to just 3.5%, its lowest level in 50 years.

The so-called “real” unemployment rate, which factors in those out of the workforce and those who are underemployed, fell 0.1% to 6.9%.

The end of a General Motors Company GM strike helped drive a 54,000 gain in manufacturing jobs in the month, more than any other industry. The retail sector continued to struggle, losing 18,000 in clothing and clothing accessories and gaining just 2,000 jobs overall as holiday shopping season ramps up.

Wage growth also came in slightly ahead of expectations, up 3.1% from a year ago.

In addition to the strong November numbers, the Labor Department also revised its jobs growth estimates for the last two months higher as well. The Labor Department added 13,000 jobs to its September estimate and 28,000 jobs to its October estimate, bringing the revised monthly totals up to +193,000 and +156,000, respectively.

Market Reaction To The Jobs Report

Joseph Wolfers, professor of economics and public policy at the University of Michigan, said the resilience of the U.S. economic expansion is extremely impressive.

“Since 2011, the economy has pretty consistently produced around 150-200k jobs per month. There are occasional fits and starts when we think that trend has changed, but really, it's just one long straight line,” Wolfers tweeted.

The U.S. economy has now added jobs for 110 consecutive months, by far the longest streak in history (48 months from 1986 to 1990).

Investors initially reacted positively to the blowout jobs numbers, with the SPDR S&P 500 ETF Trust SPY trading higher by 0.6%.

Investors will now watch to see if the impressive jobs report will impact the Federal Reserve’s monetary outlook next week. The bond market is currently pricing in a 37.6% chance of another Fed rate cut within the next six months, according to CME Group.

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