This was a big week for American jobs, with several employment reports on the schedule. Initially, the jobs reports started coming up on the soft side, with the JOLTS job openings falling to the lowest level in two years, while ADP employment softened, as they approached the 100K.

This indicated that the labour market was weakening. But, Thursday’s unemployment claims remained within the previous rage, while on Friday the Non Farm Payrolls leaned on the positive side, indicating stability in the labour market. The bond market has been supportive, with rates 4-6 basis points higher and the belly bulging.

The consensus for November’s NFP was +180K. The employment numbers for November have been slightly above expectations, while the unemployment numbers have been negative. Although this time both the employment and the unemployment numbers beat expectations.

The unemployment rate declined by 2 points despite the increase in the participation rate, which makes this even stronger. The USD jumped higher after this report, with the market pricing for Fed rate reduction next year quickly reduced to 112 basis points from 121 bps before that.

November 2023 US Employment Data from the Non-Farm Payrolls Report

• November non-farm payrolls +199K vs +180K expected
• October non-farm payrolls were +180K
• Two-month net revision K vs -101K prior
• Unemployment rate +3.7% vs 3.9% expected
• Prior unemployment rate 3.9%
• Participation rate 62.8% vs 62.7% prior
• U6 underemployment rate 7.0% vs 7.2% prior
• Average hourly earnings MoM +0.4% vs +0.3% expected
• Average hourly earnings +4.0% YoY vs +4.1% expected
• Average weekly hours 34.4 vs 34.3 expected
• Change in private payrolls +150K vs +153K expected
• Change in manufacturing payrolls +28K vs +30K expected
• Household survey K vs -348K prior
• Birth-death adjustment +4K vs +412K prior

The publication revealed that the unemployment rate fell to 3.7% from 3.9% in November, while annual wage inflation, as measured by the change in Average Hourly Earnings, remained stable at 4%, matching experts’ expectations. As we said, Labor Force Participation Rate increased from 62.7% to 62.8%, so this employment report is looking solid and the USD is ending the week on the right foot.