November jobs report

The November 2016 jobs report indicates an improvement in the labor market. Non-farm employment in the United States (SPY) (SPXL) added 178,000 jobs in November compared to 161,000 in October. It was above market expectations of 175,000 jobs.

Will the November Jobs Report Delay the Fed’s Rate Hike Urgency?

Key highlights of the November jobs report

  • Job growth occurred in service-providing industries and the healthcare industry in November 2016.
  • Healthcare (XLV) added 28,000 jobs in November.
  • Professional and business services added 63,000 jobs in November.
  • Financial services (XLF) added 18,000 jobs in November.
  • Employment in the manufacturing sector remained constant in November.

Impact on the economy

The labor market provided stronger job growth in June and July. These employment figures are increasing confidence in the US economy (QQQ) (VOO). The figures are minimizing concerns about a weakness in the labor market.

However, the September and October jobs reports didn’t meet market expectations. In November 2016, the jobs report met market expectations, improving confidence in a stronger labor market.

Probability of a rate hike

After a dovish stance in September, the Fed is expected to hike interest rates at its December 2016 meeting. In the September meeting, Fed officials said that inflation is still low. So they backed away from their rate hike urgency. But after the strong jobs report in November, we may see a rate hike in December.

In the next part, let’s look at the ADP employment report for November 2016.

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