U.S. Nonfarm Payrolls Up by 263K in November, More than Expected

The labor market has been the juggernaut of the U.S. economy over the past two years, spearheading its recovery from the coronavirus pandemic which broke out in 2020. So today’s release of Nonfarm payrolls was as important as hardly ever before. Jobs growth, which has been blamed for runaway inflation in the U.S., has begun easing too. U.S. employers slashed 76,835 jobs in November, some 127% more than in October and five times more than a year ago, private employment tracker Challenger, Gray&Christmas (more known as the Challenger’s Job Cuts indicator) reported earlier on Thursday. Prior to that, payrolls processor ADP said private sector employers in the United States created just about 127,000 jobs in November, the smallest in almost two years.

Meanwhile, U.S. equities began December on a mixed tone as attention turned to corporate headlines and today’s key jobs report. The markets closed out a strong November, which saw the Dow Jones and S&P 500 advance more than 5%, with the Nasdaq gaining over 4%. Meanwhile, futures contracts on the S&P 500 dropped by 1.55% as of 2:40 p.m. CET, while Nasdaq Composite contracts nosedived by 2.41%.

The U.S. Personal Consumption Expenditure Index, an inflation indicator known as the PCE and closely tracked by the Fed, grew by an annual rate of 6% in October versus a 6.3% growth in the year to September.

Joblessness among Americans reached an all-time high of 14.8% in April 2020, with the loss of some 20 million jobs after the Covid-19 breakout. Since then, the U.S. Labor Department’s non-farm payrolls report has reported hundreds of thousands of job additions every month. However, the national jobless rate has remained for almost a year now at around 4% level, but the job participation rate has been constantly falling, meaning more and more Americans are getting discouraged from looking to be employed. Having said that, U.S. average hourly earnings have been climbing, trying to catch up with upsurging inflation, since June 2021.

On the heels of the Fed’s speech, the yield on the 10-year Treasury note plunged 17 basis points. That also sent the U.S. dollar retreating against the euro, pound sterling, and Japanese yen, and lifted gold futures to their highest level since June. Shares of miners Barrick Gold (GOLD) and Newmont Corporation (NEM) advanced. Salesforce (CRM) shares led both the Dow and S&P 500 lower following word that co-CEO Bret Taylor was leaving the company. Shares of Costco Wholesale Corporation (COST) tumbled as the warehouse store chain’s sales slowed last month, and its ecommerce revenue declined by double-digit percentages. Dollar General (DG) shares sank as the discount retailer missed quarterly earnings estimates and cut its full-year profit guidance.

Commoditywise, crude oil futures rose as China relaxed some of its strict Covid-19 restrictions (read below), easing concerns about falling demand for crude in that country. Major cryptocurrencies traded lower. Brent crude futures also rose slightly to $87.65 per barrel at the time of writing.

European stocks were little changing, with the British FTSE down just 0.1%, German stocks rose by 0.45%, while France’s CAC 40 remained nearly unchanged. The Pan-European Stoxx 600 edged a bit lower at the time of writing, trimming its 7th straight weekly gain. Sectorwise, real estate is making the biggest gains, up 1.1%, while oil and gas sector stocks being the worst performers, down 1.8%. Basic resources are also struggling, down 0.9%.

Most Asian stock markets retreated in cautious trade earlier this morning ahead of key U.S. payrolls data, although a report that China plans to further scale back its strict anti-Covid measures helped trim losses. China’s bluechip Shanghai Shenzhen CSI 300 index fell 0.5%, while the Shanghai Composite fell 0.3%. Both indexes were set to rise 3.6% and 1.7% for the week, respectively. The Japan’s Nikkei 225 retreated by 1.59% to 27,778. The Hang Seng in Hong Kong sank 0.33% to 18,675. The Kospi in Seoul shed 1.84% to 2,434.