Employers in the United States only added a paltry 210,000 jobs in November, sharply below consensus forecasts of 550,000.
The number is more than half as many as in October.
The underwhelming job creation numbers triggered Wall Street stock futures to shoot up, as investors bet it would ease pressure on the Fed to accelerate its timetable for scaling back stimulus.
The Labor Department’s jobs report, released Dec. 3, shows that non-farm payroll employment rose by 210,000 in November after rising by a revised 546,000 in October.
The unemployment rate fell 0.4 percentage points to 4.2 percent, a 21-month low, while the total number of unemployed persons fell by 542,000 to 6.9 million.
The labor force participation rate, a measure of people working or actively looking for work, edged up 0.2 percentage points to 61.8 percent, the report also showed. While that’s an improvement over October’s rate, it remains a historically depressed level. In February 2020, the labor force participation rate stood at 63.6 percent, with a historical peak of 67.3 percent in April 2000.
“Labor force participation rose, a welcome sign,” Bankrate Senior Economic Analyst Mark Hamrick told The Epoch Times in an emailed statement. “Wage growth remains solid with a year-over-year gain of 4.8 percent, while mindful that inflation has been running hot.”
Surging inflation and signs of continued labor market recovery have put pressure on Fed policymakers to accelerate their schedule for scaling back, or tapering, the central bank’s $120 billion in monthly purchases of U.S. Treasury and mortgage-backed securities.
Federal Reserve Chair Jerome Powell in recent testimony suggested a faster taper than the $15 billion per month reduction that’s currently in place, while acknowledging that it’s time to “retire” the term “transitory” as a description of the current bout of inflation, which hit a 31-year high in the 12 months through October and rose at a faster pace than in September.
Goldman Sachs recently predicted that the persistence of inflationary pressures will force the Fed to double the pace of the taper to $30 billion per month starting in January, which would bring the timeline forward to mid-March.
Market analysts said ahead of the release of the Labor Department report that a strong job creation number could reignite investor concerns for a faster timetable for the Federal Reserve to phase out its massive bond-buying program, which the central bank is currently poised to do over eight months.
“Assuming the Omicron news remains less end of the world, a print above 550,000 jobs should see the faster Fed-taper trade reassert itself,” Jeffrey Halley, senior market analyst at Oanda, told Reuters.
“That may nip the equity rally in the bud, while the U.S. dollar and U.S. yields could resume rising,” he added.
But the Labor Department’s below-expectations job creation number appears to have been met with early enthusiasm on Wall Street, with U.S. stock futures spiking on the news.
Tradingview market data from around 8:55 a.m. New York time suggested Wall Street’s main indexes were poised for gains on the opening bell. Futures on the Dow Jones Industrial Average rose 0.21 percent, S&P 500 futures were up 0.31 percent, and Nasdaq 100 futures were up 0.5 percent. All three indexes ended Thursday in the green, with the Dow and S&P 500 up over 1.4 percent and the Nasdaq up 0.71 percent.
Equity markets flitted between gains and losses all week as investors digested updates on the newly detected Omicron variant, which is spreading globally and leading many countries to reimpose travel restrictions.
“The emergence of the new COVID-19 variant has supplied a new and unwelcome source of uncertainty for the economy. That will be more relevant for the December jobs report a month away,” Hamrick said.
