TRUDEAU SAYS IT LOOKS LIKE BOC WILL BE LOWERING RATE AGAIN

MNI BRIEF: Canada Commits To Just One Of Three Fiscal Anchors

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

MNI China Daily Summary: Tuesday, December 10

MNI: USDA: 2024/2025 CORN PRODUCTION EST 15.14B BSL

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

EZ/UK Bond Supply Calendar: 4.25% Jul-34 Gilt Due Wednesday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

US DATA: Payrolls Wrap: December Pause Looks Off The Table

US DATA
USEM BulletFixed Income BulletsData BulletBulletMarketsEmerging Market NewsForeign Exchange BulletsNorth America
  • The payrolls report was very close to expectations for November alone, rising 227k vs consensus 220k and a primary dealer analyst median of 225k.
  • Two-month revisions were at least positive at +56k after the heavy -112k revisions in the October report, but only +24k of that upward revision came in October which could have underwhelmed expectations.
  • The average of the last two months as a crude estimate of underlying trend sees nonfarm payrolls growth of 132k and private at 96k.
  • A dovish angle can be made as the seasonal factors were particularly beneficial again this month. By our calculations, October would have seen -50k vs +36k if the Oct’23 factor was used instead of Oct’24, whilst November would have seen +147k vs +227k on the same basis.
  • The household survey was clearly weaker than the establishment survey, with obvious signs of softness/loosening in labor market conditions. The unemployment rate increased to a 4-month high at 4.246% (+0.1pp, cons 4.15%) and the U-6 rate also ticked up 0.1pp to a 4-month high 7.8%.  
  • The prime age category drove this increase, rising from 3.53% to 3.68% by our calculations to nudge above 3.65% in July for technically its highest since Nov 2021.
  • Whilst the unemployment rate was more dovish than expected, the data leave it continuing to track below the 4.4% the median FOMC member forecast for Q4 back in the September SEP. In Governor Bowman’s words, the unemployment rate remains at a historically low level.
  • Indeed, averaging 4.20% in Oct-Nov, it’s currently only just meeting the lowest estimates (from presumably the most hawkish FOMC members) with an entire FOMC range of 4.2-4.5%.
  • Nevertheless, there don’t look to be enough signs of strength here to warrant a pause later this month and accordingly Fed Funds futures has jumped to pricing 22.5bp of cuts vs 18bp prior. CPI will have to be extremely strong on Wednesday to see a pause back on the table along with a blackout period steer.  
325 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • The payrolls report was very close to expectations for November alone, rising 227k vs consensus 220k and a primary dealer analyst median of 225k.
  • Two-month revisions were at least positive at +56k after the heavy -112k revisions in the October report, but only +24k of that upward revision came in October which could have underwhelmed expectations.
  • The average of the last two months as a crude estimate of underlying trend sees nonfarm payrolls growth of 132k and private at 96k.
  • A dovish angle can be made as the seasonal factors were particularly beneficial again this month. By our calculations, October would have seen -50k vs +36k if the Oct’23 factor was used instead of Oct’24, whilst November would have seen +147k vs +227k on the same basis.
  • The household survey was clearly weaker than the establishment survey, with obvious signs of softness/loosening in labor market conditions. The unemployment rate increased to a 4-month high at 4.246% (+0.1pp, cons 4.15%) and the U-6 rate also ticked up 0.1pp to a 4-month high 7.8%.  
  • The prime age category drove this increase, rising from 3.53% to 3.68% by our calculations to nudge above 3.65% in July for technically its highest since Nov 2021.
  • Whilst the unemployment rate was more dovish than expected, the data leave it continuing to track below the 4.4% the median FOMC member forecast for Q4 back in the September SEP. In Governor Bowman’s words, the unemployment rate remains at a historically low level.
  • Indeed, averaging 4.20% in Oct-Nov, it’s currently only just meeting the lowest estimates (from presumably the most hawkish FOMC members) with an entire FOMC range of 4.2-4.5%.
  • Nevertheless, there don’t look to be enough signs of strength here to warrant a pause later this month and accordingly Fed Funds futures has jumped to pricing 22.5bp of cuts vs 18bp prior. CPI will have to be extremely strong on Wednesday to see a pause back on the table along with a blackout period steer.