Forecasts for the November employment report center on a rebound in the jobs market from the October reading, which was depressed by special factors.
Economists predict an increase in nonfarm payroll employment of 215,000 in November, according to FactSet. That would follow an increase of just 12,000 in October, which was far below the forecast of 120,000. The Bureau of Labor Statistics noted that hurricanes Helene and Milton and strikes in the manufacturing sector likely depressed hiring activity.
“We had a really low number in October … so we’re expecting a big recovery,” says José Torres, senior economist at Interactive Brokers. “Overall, the economy is in good shape.” He predicts the economy added 190,000 jobs in November.
Meanwhile, the unemployment rate is expected to hold steady at 4.1%. A sharp jump in the unemployment rate this past summer raised fears of a recession, but those concerns have faded.
Despite the rebound in job growth and progress toward reducing inflation seemingly stalling in recent months, the Federal Reserve is still expected to announce an interest-rate cut on Dec. 18, following its next meeting.
Monthly Payroll Change
Source: Bureau of Labor Statistics. Data as of Nov. 30 2024
April Jobs Report Forecast Highlights
- Jobs report release date and time: Friday, Dec. 6 at 8:30 a.m. EST
- Nonfarm payroll employment is forecast to rise 215,000 vs. a 12,000 increase in October, according to FactSet.
- The unemployment rate is forecast to hold steady from October at 4.1%.
- Hourly earnings are predicted to rise 0.3% on a monthly basis, up from 0.4% in October.
November Jobs Rebound
A primary driver of the big expected gain in hiring is the bounceback from October. The Bureau of Labor Statistics estimates that nearly 40,000 striking workers returned to work in November. “You could take roughly 50,000 jobs from [November] and give it to [October],” says David Kelly, chief global strategist for J.P. Morgan Asset Management. He expects the employment report will show the economy added just over 200,000 new jobs in November.
At UBS, economists believe roughly 60,000 jobs were added as a rebound from storm-affected areas. Overall, they predict a rise in nonfarm payroll employment of 250,000.
Torres sees hiring in November driven by noncyclical parts of the economy, including government, education, and health services. He also thinks manufacturing hiring should improve.
On the negative side, Goldman Sachs economists say a later-than-usual Thanksgiving and Black Friday could subtract 15,000 from retail hiring. They call for an increase in hiring of 235,000, which includes 50,000 as a bounceback from the hurricanes.
Jeffrey Roach, chief economist at LPL Financial, forecasts a rise in nonfarm payroll employment of roughly 175,000. “I think there are not a lot of categories that would have upside surprises, just because we’re seeing a lot of individuals at that level less willing to quit,” he says. However, there is one place he thinks may have unexpectedly high job growth: “Transportation and warehousing. Think about some of the work that’s going on, the demand for storage, whether on the consumer or corporate side.”
Will the Fed Cut Rates in December?
Heading into the final Fed meeting of the year, bond traders are looking for another interest-rate cut. According to the CME FedWatch tool, futures markets currently predict a 75% chance of the central bank cutting interest rates by a quarter point. The remaining 25% chance is for no cut, with virtually no one predicting a larger cut. The current federal-funds rate target range is 4.50%-4.75%.
Kelly is among those anticipating a cut, but he says that “it’s not a slam dunk.” One factor that could lead the Fed to hold off is bad inflation news from the November Consumer Price Index report, which comes out later this month. There could also be stronger-than-expected wage growth in the November jobs report. “There’s no urgency for the Fed to cut based on economic momentum, and if they saw some signs that inflation was being a little stickier, they might not cut rates in December,” Kelly says. However, “at the moment, I’d say they probably will.”
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