November Jobs Rain on the March Rate Cut Parade
The November jobs numbers were a kick in the teeth to traders betting that the Federal Reserve would start cutting rates in March.
The economy added 199,000 jobs on a seasonally adjusted basis in November, a big jump from the 150,000 for October. This was stronger than expected. What’s more, the unemployment rate moved back down to 3.7 percent from 3.9 percent, which no one had in their forecast.
The effect of this has been to destroy the narrative that the labor market was on a glide path to looser conditions. That narrative never made much sense since we really only had one month—October—of anything that really looked like a significant softening in the labor market. When monthly data happens to fit the prevailing wisdom, the market often forgets the rule that you should not make too much of one month’s data.
It was…
