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: November jobs report is most important data for inflation this year- and not in a good way

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The November U.S. jobs report on Friday showed the U.S. economy gained 261,000 jobs last month, with the unemployment rate holding steady at 3.7%.

Economists polled by the Wall Street Journal had expected an addition of 200,000 jobs.

Wages jumped 0.6% in November, double the expected pace.

Below are some initial reactions from economists and other analysts as U.S. stocks
DJIA,
-0.70%

SPX,
-0.78%

traded lower and the yield on the 10-year Treasury note
TMUBMUSD10Y,
3.582%

jumped following the data on nonfarm payrolls.

“You probably want to revise your view on inflation and it’s overall dynamic more based on today’s job report than any other data report this entire year. And not in a favorable direction,” said Jason Furman, economics professor at Harvard and former Obama White House economist.

“A stronger than expected 263,000 monthly payroll print plus the spike in wages…will reinforce the Fed’s assessment that the labor market remains very overheated, and rates will need to go higher for longer in order to bring it back into balance,” said Krishna Guha, vice chairman of Evercore ISI.

“The Fed will not like the renewed strength in wages,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“The U.S. labor market has lost some momentum this year, but it’s still speeding ahead as we approach the new year. Continue to underestimate the momentum in the U.S. labor market at your own peril. Job gains continue to be added at a pace that would have drawn cheers in 2019. The labor market might encounter some bumps in the road next year, but it’s heading into 2023 cruising,” said Nick Bunker, head of economic research at the Indeed Hiring Lab.

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