Friday, December 8, 2017

More economic goodies for the Santa Claus rally this morning: November non-farm payrolls from the Bureau of Labor Statistics (BLS) just released this morning hit 228K, well above analysts’ consensus of 195K. The Unemployment Rate remained unchanged from October at 4.1%.

The Private sector brought the lion’s share of new jobs in the month at 221K. Professional/Business Services led the way with 46K, Manufacturing reached 31K, Healthcare 30K and Construction hit 24K. Manufacturing and Construction in particular represent much healthier employment sectors than we’ve seen in the past several years.

Revisions to the past 2 months went up 3K: October jobs totals were revised down from 261K originally reported to 244K this morning, but September’s original 18K was ratcheted up to 38K. Both months illustrate the hurricane-related issues that decimated the jobs markets in Texas and Florida early in the late 3rd quarter.

Average hourly earnings rose 0.2% in November, 2.5% year to date. Average wage growth came up 0.19% to a rate of $26.55 per hour. The average workweek grew 0.1% to 34.5 hours, and the Labor Force Participation Rate stayed unchanged at 62.7%. The U-6 (aka “real” unemployment) ticked up to 8.0% from 7.9% in October. These numbers all retain a tepidness we’ve seen going back several years, but at least most are pointed in the right direction.

Indications that a strong holiday season will be in the offing shows up in the Retail and Transportation/Warehouse segments, which reached 18.7K and 10.5K, respectively, and both higher than expectations. These are both seasonally adjusted numbers, meaning it’s understood that holiday shopping season would provide a boost to both Retail and Warehousing, but today’s numbers even outshined those expectations.

Market futures responded favorably to this latest news, indicating investors are already expecting an interest rate hike from the Fed next week. This has long been expected, aside for a short time when hurricane-related issues — and questions regarding who would succeed Janet Yellen as Fed Chair — gave analysts reason to pause.

No such reason exists this morning. It looks like it’s going to be a good holiday season for the markets.

Mark Vickery
Senior Editor

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