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U.S. businesses are expected to add 187,000 jobs in November, an increase in October and another sign of a strong labor market that will bolster the Federal Reserve’s view that it should remain on hold. high interest rates for a while.
The expectation of non-farm payrolls, based on a Bloomberg survey of economists, will mark an increase from 150,000 in October. The US unemployment rate is expected to remain at 3.9 percent.
The Bureau of Labor Statistics will release its data at 8.30am Eastern Time on Friday.
While markets are betting that the Federal Reserve will begin cutting interest rates from their current target of 5.25 percent to 5.5 percent before the middle of the year, officials said central bank remains cut off from the agenda.
One of the main reasons is that the labor market remains stable even though the Fed has raised rates by 525 basis points since the beginning of 2022 in an effort to curb inflation.
Fed chairman Jay Powell said last week that labor market conditions “remain strong” although job openings are slowing to a more “supportive” level. Statisticians want to see signs that their fiscal policy is beginning to reduce wage growth to levels consistent with their goal of price stabilization at 2 percent.
Stephen Stanley, chief US economist at Santander Bank, said: “If you go back to the beginning of this year, the consensus was that we would see negative wages in the spring. Employment growth slowed, but was more moderate than expected. So far the numbers have been very stable.”
The labor market statistics in November are expected to show an increase in wages by 0.3 percent per month, and at an annual rate of 4 percent.
“We expect (annual wage growth) to come somewhere in the high 3 to 4 percent,” said Andrew Patterson, senior international economist at Vanguard, an investment manager. “It’s too high for the Fed’s comfort level.”
The Federal Open Market Committee’s policymakers are set to meet in Washington next week, with a policy announcement due Wednesday afternoon. . Prices shown are subject to change.
Academic economists surveyed by the Financial Times believe that the Fed will not cut rates until the second half of next year. However, the market is quickly reducing the rate, with some traders expecting a significant slowdown in the labor market in the coming months to force the central bank to reduce the cost of borrowing at some point. early in March.
The result of several protests in the auto industry and the press is expected to have resulted in some jobs this past month.
Some economists are anticipating the analysis of November’s figures showing the weakening of employment conditions, and the number of workers who were forced to work part-time for economic reasons.