Investors’ attention is focused on whether the jobs report “beats” or “misses” analysts’ consensus expectations each month.
Economists anticipate November job gains to be modest, with an expected total of about 240,000 net new positions created. Resumptions from strikes in Hollywood and auto industries could boost this total figure further.
Details
The monthly nonfarm payrolls report, more commonly known as the job report, is one of the most critical pieces of economic data released each month. It is used by the Federal Reserve to set interest rates that help combat inflation and recession; Wall Street traders use it for buying/selling/trading stocks; it serves as an early warning system; it may bring good or bad news about our economy; understanding its message can lead to informed investment decisions.
expectations
The jobs report is the first major economic release each month and provides both an in-depth and broad picture of labor market health, as well as potentially impactful insights for investors and policymakers.
After months of deceleration, hiring is expected to pick up slightly this month with economists forecasting nonfarm payrolls growing by approximately 180,000 positions. An extra boost may come from workers returning after Hollywood and auto industry strikes returning to work; it could add as many as 38,000 more positions to November totals.
An impressive economic report is an encouraging sign, yet can also lead to price increases and inflation risks. When consumer prices begin to surge, that could prompt the Federal Reserve to raise interest rates in an effort to slow growth and avoid recession – something which can harm stock markets while rising interest rates can discourage people and businesses from borrowing money, further impeding business investment and job creation.
not expecting?
The Jobs Report can have a profound effect on markets. This monthly snapshot includes two surveys: one that investigates hiring by businesses and governments and another focused on household employment. Collectively known as the Nonfarm Payrolls Report, this provides crucial data on both economy and jobs market conditions. Traders frequently speculate whether or not the Jobs Report will meet Wall Street forecast expectations but accurately interpreting numbers is more of an art than science.
At this juncture, it is important to bear in mind that while a strong jobs report would typically be bullish for stocks under normal circumstances, it could actually be bearish due to how it might convince the Federal Reserve to tighten up monetary policy further and prevent inflation from accelerating out of control – likely leading to long-term bearish effects for stocks. Recent data showed employers advertised fewer job than anticipated as an indication of hiring slowing.
