U.S. Outlook: Job growth downshifts in November

Posted by Editor

The payroll report for November appears to confirm the recent market narrative, and our own economic forecast, that U.S. economic growth is decelerating in the fourth quarter.

Closeup of lab workers wearing goggles and examining specimens up close.Nonfarm payroll gains slowed to only 155K last month, and the prior month’s gain was revised down to 237K from 250K.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Dec. 7.

Key observations:
  • U.S. job growth had been averaging over 200K jobs per month so far this year, but the three-month average monthly gain has now slipped to 170K jobs.
  • Initial jobless claims have been rising gradually now since hitting a cyclical low on Sept. 14.
  • The monthly pace of job gains is still well above the Fed’s estimates that only 60K to 100K jobs per month are needed today to hold the U.S. unemployment rate steady.
  • It is unlikely that today’s payroll report will deter the FOMC from hiking the fed funds rate again in December. And I still think it’s too early to rule out two more rate hikes from the Fed next year.

Read my full report.

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