at Calculated Risk on 12/05/2024 02:39:00 PM
On Friday at 8:30 AM ET, the BLS will release the employment report for November. The consensus is for 183,000 jobs added, and for the unemployment rate to be unchanged at 4.1%.
There were 12,000 jobs added in October, and the unemployment rate was at 4.1%.
We estimate nonfarm payrolls rose by 235k in Novemberabove consensus of +215k … the end of strikes and the recent hurricanes that weighed on October job growth will likely boost November job growth. We estimate that the unemployment rate was unchanged at 4.1%, in line with consensus.
emphasis added
• ADP Report: The ADP employment report showed 146,000 private sector jobs were added in November. This was below consensus forecasts and suggests job gains below consensus expectations, however, in general, ADP hasn’t been very useful in forecasting the BLS report (this also doesn’t include the boost from the end of Boeing strike and bounce back from the hurricane impact in October).
• ISM Surveys: Note that the ISM indices are diffusion indices based on the number of firms hiring (not the number of hires). The ISM® manufacturing employment index increased to was at 48.1%, up from 44.4%. This would suggest about 30,000 jobs lost in manufacturing. The ADP report indicated 26,000 manufacturing jobs lost in November.
The ISM® services employment index decreased to 51.5% from 53.0%. This would suggest 115,000 jobs added in the service sector. Combined this suggests 85,000 jobs added, far below consensus expectations. (Note: The ISM surveys have been way off recently)
• Unemployment Claims: The weekly claims report showed more initial unemployment claims during the reference week at 215,000 in November compared to 242,000 in October. This suggests fewer layoffs in November compared to October.
• Strikes: The CES strike report shows almost 40,000 employees returned from strikes during the reference period in November. This will boost the headline jobs number.
• Conclusion: Employment was impacted by strikes and hurricanes in October. There should be a bounce back in November. In the four months prior to October, employment gains averaged 140 thousand. Adding close to 40 thousand for the strikes, and maybe 50 thousand workers returning following the hurricane impact in October, would suggest employment gains will be above consensus expectations.