November Jobs Report: Rebound Expected as Unemployment Stays Steady
AInvestThursday, Dec 5, 2024 2:18 pm ET
4min read
GMUB --
TGT --
UBS --
WMT --


As the labor market continues to show resilience, economists anticipate a robust rebound in job growth for November, following a subdued October reading. The November jobs report, slated for release on December 6, is expected to reflect a surge in hiring, with nonfarm payroll employment increasing by 215,000. This significant improvement follows a lackluster 12,000 rise in October, which was depressed by special factors like hurricanes and strikes.

The unemployment rate is forecast to hold steady at 4.1%, allaying fears of a recession and indicating a healthy labor market. This stability in the unemployment rate suggests that the economy is maintaining its momentum, with job growth gradually cooling but remaining strong. Despite the expected rebound in job growth, the Federal Reserve is still anticipated to cut interest rates by 0.25% on December 18, following its next meeting, as predicted by a 75% chance in futures markets.

The expected rebound in job growth is primarily driven by the bounceback from October's special factors, as striking workers return to their jobs. This recovery is expected to be particularly pronounced in manufacturing hiring, which should improve significantly. Analysts at J.P. Morgan Asset Management and UBS anticipate a rise in nonfarm payroll employment of over 200,000, while Goldman Sachs predicts an increase of 235,000.



Within this backdrop, service sectors like education and health services are poised to contribute significantly to overall job growth. For instance, David Kelly, J.P. Morgan's chief global strategist, anticipates a substantial increase in hiring within these sectors. This robust job growth could translate into stronger earnings and revenue growth for companies in these sectors, potentially boosting their stock valuations.

Meanwhile, the delayed Thanksgiving and Black Friday could subtract 15,000 from retail hiring. However, the expected rebound in overall hiring, driven by the bounceback from October's special factors and the need for holiday season staffing, should still benefit retail stocks. Goldman Sachs predicts an increase in hiring of 235,000, including 50,000 as a rebound from the hurricanes. Retailers like Walmart and Target, which perform well during the holiday season, are likely to see a double-digit increase in sales, boosting their stock prices.



The November jobs report is expected to show a hiring rebound, with a predicted increase of 215,000 nonfarm payroll employment, following a depressed October reading due to special factors like hurricanes and strikes. The unemployment rate is forecast to hold steady at 4.1%. This rebound could boost confidence in the economy and influence stock performances, particularly in sectors expected to have unexpectedly high job growth.

Jeffrey Roach, chief economist at LPL Financial, forecasts a rise in nonfarm payroll employment of roughly 175,000, with one sector he thinks may have unexpectedly high job growth being transportation and warehousing. "Think about some of the work that’s going on, the demand for storage, whether on the consumer or corporate side," Roach says. This could translate to increased stock performances for companies in this sector, as higher demand for warehousing and storage services often indicates economic growth and increased consumer and corporate spending.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.