US Economy Adds Just 210,000 Jobs In November: 6 Experts React To Huge Payroll Miss

The SPDR S&P 500 ETF Trust SPY traded higher by 0.4% Friday morning after the Labor Department reported disappointing U.S. jobs market numbers from November.

The U.S. added 210,000 jobs in November, missing consensus economist estimates of 573,000 jobs. The U.S. unemployment rate fell to 4.2% from 4.6%. The labor participation rate hit 61.8%, its highest level since March 2020.

Wage growth was 4.8%, down slightly from 4.9% in October.

The Labor Department also revised September’s total job growth higher by 67,000 jobs to 379,000 and October’s job growth higher from 531,000 to 546,000. The combined revisions totaled 82,000 additional jobs.

The professional and business services industry led the job creation in November. The retail sector lost another 20,000 jobs in November and now has 176,000 fewer positions than in February 2020.

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Stagflation Concerns: Jay Pestrichelli, CEO of ZEGA Financial, said lackluster jobs growth coupled with continued wage growth suggests continued inflation in the U.S. economy.

“Friday's weaker-than-expected jobs report adds to the fear we’ve seen this week with the omicron variant and it may stoke fears of stagflation, which consists of slower economic growth and higher inflation,” Pestrichelli said.

Jamie Cox, Managing Partner for Harris Financial Group, said the reports looks messy and investors should wait for the December jobs report before jumping to conclusions about potential stagflation.

“And, if you think this report will push back the accelerated taper mentioned by Fed Chairman Jerome Powell this week, you would be mistaken,” Cox said.

Silver Linings: Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, said the rising labor participation rate was some hidden good news in an otherwise disappointing report.

“Markets have a lot to digest as the economy is strong, but the labor market is reaching its full potential and inflationary forces are already elevated, which is why the Fed is feeling more urgency to complete their tapering early and may need to raise interest rates more quickly than many people are expecting,” Zaccarelli said.

Lawrence Gillum, Fixed Income Strategist for LPL Financial, said a rising labor force participation rate and rising wages were two silver linings in a disappointing jobs report.

“Also, importantly, the unemployment rate for minorities and women fell meaningfully over the month, which means this job recovery is broad and inclusive,” Gillum said.

Near-Term Noise: Anu Gaggar, Global Investment Strategist for Commonwealth Financial Network, said investors should anticipate more weakness in the leisure, hospitality and retail industries in coming months.

“These are the sectors that were feeling the weight of the winter virus surge in some states and the shift in holiday shopping to online,” Gaggar said.

Joseph Brusuelas, chief economist for RSM US LLP, said the retail sector weakness was particularly surprising.

"That is due to a solid track record of hiring by retail ahead of the traditional holiday season going back several decades and business cycles. I am almost certain that will be revised up sharply over the next few months," Brusuelas said.

Photo: Ron Lach from Pexels