US economy adds 210,000 jobs in November

Nonfarm Payrolls came in much lower than expected in the November US Employment Situation report. The headline jobs number added “just” 210,000 jobs in November. This was significantly lower than the 550,000 jobs that consensus had forecast. 

Other highlights in the jobs report include:

  • Unemployment falling to 4.2% (4.5% expected, down from 4.6% in October)
  • Average Hourly Earnings (wage growth) remaining steady at +4.8% (+5.0% expected, from a slightly downwardly revised 4.8% in October)
  • An increase in the Participation Rate to 61.8% from 61.6% last month.
  • Prior month revisions to the jobs number for September and October totalled +82,000 jobs (this helps to mitigate some, but not a lot, of the -340,000 miss to the November number).

What does this mean?

In pre-pandemic times, adding 210,000 jobs would have been seen as solid jobs growth, but as the economy continues to recover from the pandemic, this will be seen as a disappointment by the Federal Reserve.

The sizeable miss to the headline jobs number will be seen as a disappointment, whilst falling wage pressures (or at least plateauing) are also interesting. It is too early to say, but if this is reflected again next month, there will be questions over the potential for inflation to start falling back.

It may also be a concern that the long term unemployed level changed little on the prior month. See here from the Bureau of Labor Statistics report:


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One of the key decisions the Federal Reserve will be looking at is whether they are happy to push ahead with tightening policy in 2022 whilst this level remains elevated. Is it just a reflection of a shift in the structural nature of the labor market?

Despite all this though, this is just one month, and with the last seven jobs reports with upward revisions, the Fed may be able to look past this fairly easily. The path to tightening has hit a bump in the road, but little more than that.

Initial Market Reaction

The initial reaction was USD negative (or at least mildly) along with being supportive for gold and equities. However, in the subsequent reaction, these moves have been unwound back to where they were before the data release.

We believe this report could be an excuse to lock in some USD profits and add to building support for equities. However, this will not be enough to throw the Fed off course, so any moves are likely to be minor.