Stocks notch a sixth straight week of gains after November jobs data

Stocks rose Friday, helping all three major indexes log their sixth consecutive week of gains after a rocky start to the month.

For the week, the Dow rose 0.01%. The S&P 500 gained 0.2% to reach its highest closing level in 2023. The Nasdaq Composite added 0.7%.

Stocks teetered on Friday before gaining to finish the session, as investors parsed the latest jobs report. The US economy added 199,000 jobs in November, according to fresh data from the Bureau of Labor Statistics. The unemployment rate slipped to 3.7% from 3.9% the prior month. Economists had predicted net job gains of 180,000 for the month and for the unemployment rate to hold steady.

Wall Street still expects the Federal Reserve to hold interest rates steady at its final policy meeting of the year. Expectations that the central bank will cut rates in March, however, fell to 44% from 55% last Friday.

Investors will be looking to the Fed meeting next week for signals about where the central bank could take rates, after bringing them to a 22-year high.

Crypto-related stocks popped, extending their gains after Bitcoin earlier this week touched its highest level in over a year. Coinbase shares rose 7.7%, Robinhood Markets shares gained 2.2% and Marathon Digital shares added 8.2%.

Carrier Global shares jumped 4.5% after the company said it would sell its global access solutions business to Honeywell. Shares of Honeywell declined 1.7%.

The Dow rose 130 points, or 0.4%.

The S&P 500 gained 0.4%.

The Nasdaq Composite added 0.5%.

As stocks settle after the trading day, levels might change slightly.

Stocks gave up some of their earlier gains on Friday, as Treasury yields rose on the stronger-than-expected labor report.

The Dow rose 40 points, or 0.1%. The S&P 500 gained 0.1% and the Nasdaq Composite added 0.2%.

The yield on the 10-year Treasury note was trading at 4.25%, after the latest jobs reading showed the labor market is staying resilient despite interest rates at a 22-year high.

Still, the S&P 500 remains within striking distance of its 2023 high, as optimism grew on Wall Street that a labor market that stays robust as inflation cools will help the Fed achieve a “soft landing” for the economy, or lower inflation without triggering a recession.

An attendee signs into a career fair hosted by the New Hanover NCWorks and the Cape Fear Workforce Development Board in Wilmington, NC, in June.

The unemployment rate for Black men older than 19 rose sharply in November as more workers across demographic groups trickled into the job market.

Unemployment among Black men 20 years of age and older rose to 6.4% in November, up from October’s 5.3% rate, the Bureau of Labor Statistics reported Friday. For Black women older than 19, the unemployment rate retreated last month after rising steeply in October. Unemployment among Black Americans broadly held steady at 5.8% last month.

Meanwhile, the labor force participation rate, or the share of workers employed or looking for a job, rose across most demographic groups, more so for Black and White men. The participation rate for Black men older than 19 increased to 69.2% in November, up from the prior month’s 67.5% rate. The participation rate for White adult men rose to 70.4% from 70% during the same period.

The participation rate of prime-age women, those between the ages of 25 and 54, remained near a record high last month. For women older than 19, the participation rate fell slightly.

Acting U.S. Secretary of Labor Julie Su speaks at an event on the Biden Administration's workforce initiative plan at Carver Vocational School on November 13 in Baltimore, Maryland. 

Acting Labor Secretary Julie Su told CNN Friday that the November jobs report shows “Bidenomics is working.” 

In an interview on CNN News Central, Su said the November data is “another strong jobs report, indicative of stable and steady growth.”

“Bidenomics is working. We are investing in America, by investing in America’s infrastructure, clean energy, manufacturing and its workers, and labor force participation rate remains robust and this is exactly what we want to see in a strong economy,” Su said.

When pressed on new CNN polling showing that 71% of Americans view the current economic conditions as poor, Su said that she thinks it is a “reflection of the after-effects of the pandemic and the global economic stress that it induced.”

She also said she thought that part of that sentiment was due to people feeling “like the economy has not been fair for too long.”

A customer selects goods at a supermarket in San Mateo, California, on November 29.

Americans’ long-run expectations of inflation rates fell in December after reaching their highest level in 12 years in the prior month. That’s a relief for the Federal Reserve, which pays close attention to US consumers’ perceptions on prices.

The University of Michigan’s latest consumer survey showed that inflation expectations in the next five years fell to 2.8% in December, according to a preliminary reading, down from November’s 3.2% rate. That matched the second-lowest reading notched since July 2021.

The university’s survey also showed that Americans’ attitudes about the economy rebounded sharply, soaring by 13% in December from November, “erasing all declines from the previous four months, primarily on the basis of improvements in the expected trajectory of inflation,” according to a release.

“There was a broad consensus of improved sentiment across age, income, education, geography, and political identification,” said the university’s Surveys of Consumers Director Joanne Hsu in a release.

“A growing share of consumers — about 14% — spontaneously mentioned the potential impact of next year’s elections,” she noted. “Sentiment for these consumers appears to incorporate expectations that the elections will likely yield results favorable to the economy.”

Striking United Auto Workers (UAW) march in front of the Stellantis Mopar facility on September 26, in Ontario, California.

The US economy notched another solid month of job growth, with an added lift from actors and autoworkers coming off the picket lines.

The largest employment gains last month came in health care and government, which added an estimated 93,200 and 49,000 jobs, respectively. Manufacturing saw a boost, too, largely because of the return of striking autoworkers, which lifted motor vehicles and parts employment by 30,000 jobs.

Additionally, the resolution in the Screen Actors Guild strike against Hollywood studios resulted in 17,200 jobs added in the motion picture and sound recording industries.

In total, the BLS was anticipating a net gain of 35,000 workers returning after strikes: The agency estimated that 61,000 workers were absent from the labor market due to labor disputes, versus 96,000 the month before.

Taking into account those one-time gains, the underlying rate of job growth is likely around 160,000 jobs per month, which aligns with the 2019 average, wrote Julia Pollak, senior economist at ZipRecruiter.

A month earlier, those effects swung the other way.

“Some of the weakness last month may have been illusory, just due to the strikes,” Pollak told CNN earlier this week in an interview.

The United Auto Workers union, in an unprecedented and successful action, went on strike against the Big Three automakers of Ford, General Motors and Stellantis from mid-September through the end of October.

October’s employment report included 33,200 jobs counted as lost in the motor vehicles and parts industry. BLS attributed those declines to strike activity: The agency’s strike report for that month counted 25,300 Ford, GM and Stellantis workers on strike.

Additionally, the BLS strike report for November indicated that strikes ended for 16,000 SAG-AFTRA workers after the actors union and Hollywood studios reached an agreement in the early part of last month

The stronger-than-expected gains of 199,000 jobs in November, and the unemployment rate falling back down to 3.7%, should alleviate any concerns of an imminent recession, economists said Friday.

“This is what a soft landing looks like,” Joseph Brusuelas, principal and chief economist with RSM US, wrote in a note issued Friday.

Through November, the United States has added 2.58 million jobs, and the unemployment has remained below 4%, while inflation has eased to 3.2% after starting the year at 6.4%, he added.

“This is not a recession but a sustained economic expansion amidst labor market conditions that meet our definition of what constitutes full employment,” he wrote. 

The civilian labor force grew by 532,000 workers last month, and the number of unemployed fell by 215,000 people, which helped raise the labor force participation rate to 62.8% (matching a post-pandemic high) and bring the unemployment rate down to 3.7% from 3.9%, according to Bureau of Labor Statistics jobs data released Friday.

“The household survey confirms the strength exhibited by the payroll survey,” the Economic Policy Institute’s Elise Gould wrote Friday. “Here, we can look under the hood of the labor market data and explore differences by gender, age, and race/ethnicity. As the unemployment rate dropped, the prime-age employment rate ticked up to 80.7%.”

Friday’s jobs report is unlikely to sway the Federal Reserve, which is holding its policymaking meeting next week. Markets widely expect (with a 98.2% probability) the central bank to hold rates steady, according to CME FedWatch.

Before the Fed issues its latest decision, however, critical inflation data is due: The November Consumer Price Index and Producer Price Index are scheduled to be released on Tuesday and Wednesday, respectively, next week.

President Joe Biden walks on the South Lawn to board Marine One before departing the White House on December 8.

President Joe Biden cheered Friday’s jobs report, which showed that the labor market remained solid in November.

Employers added 199,000 jobs last month, a robust gain by historical standards, while the unemployment rate dipped to a low 3.7%. The latest labor data released this week shows that America’s job market is running at a cooler pace compared to prior years, but remains steadfast in the face of the highest interest rates in 22 years.

“On my watch we have achieved better growth and lower inflation than any other advanced country. A year ago, forecasters said it couldn’t be done,” Biden said in a statement on Friday.

Biden also acknowledged that some Americans are still feeling the pinch of high inflation, calling on “large corporations to pass along the savings to consumers” due to recent supply-chain improvements.

“I’m doing everything in my power to bring down prescription drug costs, health insurance premiums and utility bills,” he said. “I’m fighting to eliminate junk fees that some banks, airlines, and other companies use to rip off consumers.”

Stocks turned higher on Friday as investors continued to parse the hotter-than-expected jobs report.

The Dow rose 85 points, or 0.2%. The S&P 500 gained 0.2% and the Nasdaq Composite added 0.1%.

Investors say that while the labor report was stronger than anticipated, the Federal Reserve is likely still on track to pause interest rates at its meeting next week.

But it does put into question the timing and pace of rate cuts that Wall Street has priced in starting in the first half of 2024.

“Today’s jobs report was a non-event. It wasn’t strong enough to bring back the hawks, but also not weak enough to move rate cuts forward,” said David Russell, global head of market strategy at TradeStation, in written comments on Friday. “The main risk is that the Fed won’t see any reason to rush rate cuts.” 

Pedestrians outside the New York Stock Exchange on December 7 in New York City.

US stocks opened lower on Friday morning as traders digested a strong jobs report that showed a resilient labor market but brought into question whether the Federal Reserve will pivot towards interest rate cuts early next year.

The US economy added 199,000 jobs in November, according to Bureau of Labor Statistics data. The unemployment rate fell to 3.7% from 3.9% the month before.

Economists were expecting net job gains of 180,000 for the month and for the unemployment rate to hold steady.

The Dow dropped 33 points, or 0.1%, on Friday morning. The S&P 500 fell 0.2% and the Nasdaq was down 0.4%.

Treasury yields popped on the news, with the benchmark 10-year Treasury yield crossing 4.25% on Friday morning.

While a strong labor market is good for Main Street, Wall Street views it as a signal that the Federal Reserve could keep interest rates higher for longer.

“Fed Chair Powell will likely find reports like this, along with the recent dramatic shift in investor expectations, as creating a need for more hawkish messaging at the upcoming Fed meeting,” said Jason Pride, chief of investment strategy and research at Glenmede, in a note on Friday. The central bank’s policymaking committee is set to meet next week, on December 12-13.

Before Friday’s report, financial markets saw a 58% chance that the Federal Reserve would cut interest rates at its March policy meeting, according to the CME FedWatch Tool. That fell to 49% following the report.

Both the Dow and S&P 500 are tracking towards a losing week, breaking a five-week winning streak.

In corporate news, shares of Carrier Global were nearly 5% higher after the company said it would sell its global access solutions business to Honeywell. Shares of Honeywell, meanwhile, fell 1.4% on the news.

U.S. Federal Reserve Board Chairman Jerome Powell participates in a panel discussion on “Monetary Policy Challenges in a Global Economy” at the 24th Jacques Polak Annual Research Conference on November 8 at the IMF headquarters in Washington, DC. 

The US job market remained on strong footing in November, showing that the economy is still humming along in the face of high interest rates. That means a soft landing — a scenario in which inflation slows without a sharp rise in unemployment — remains a possibility.

Monthly job growth has been weaker compared to the robust years of 2021 and 2022, but it’s still well above the minimum number of monthly job gains needed to keep up with population growth, which is somewhere between 70,000 and 100,000 jobs.

“Today’s report shows a jobs market that is doing better than expected, supporting a higher-for-longer Fed and strengthening the case for a soft-landing,” Damian McIntyre, portfolio manager at Federated Hermes, wrote in a note Friday.

Still, the Fed wants to see consistent “below-trend growth” to be assured that inflation is on its way to the central bank’s 2% target. The Fed’s preferred inflation gauge — the Personal Consumption Expenditures price index — rose 3% in October from a year earlier, down from its four-decade high of 7.1% in June 2022, but still above 2%. The core measure excluding food and energy prices rose 3.5% in 12 months ended on October.

The Fed kicks off its two-day policy meeting next week and officials are widely expected to hold the central bank’s key lending rate steady for the third consecutive meeting.

Anyone arguing for a soft landing — where the economy slows without a massive uptick in unemployment — has the evidence to support that theory today, said Christopher Rupkey, chief economist at Fwdbonds.

The only caveat, he said in a note Friday, is that the economy “may not be coming in for a landing at all, as it is still up in the air flying high.”

Time will tell if this reignites inflation pressures and forces Fed officials to keep rates higher for longer next year, Rupkey said.

“The Federal Reserve may have just as well been shooting blanks at the economy the last year because it is not slowing down and the labor market is not rebalancing enough to take inflation risks off the table,” he said.

US futures fell sharply Friday morning after the latest US jobs report came in stronger than expected.

Futures attached to the Dow dropped 100 points, or 0.3%. S&P 500 futures fell by 0.2% while Nasdaq futures were down 0.6%.

Treasury yields also popped higher on the news, rising above 4.25%.

Both the Dow and S&P 500 are tracking towards a losing week and could break a five-week winning streak.

While a strong labor market is good for Main Street, Wall Street views it as a signal that the Federal Reserve could keep interest rates higher for longer.

Ahead of the jobs report, financial markets saw a nearly 100% chance that the Fed would continue to pause rate increases at its final meeting of the year in December. That number fell only slightly following the report, to 97.5%, according to the CME FedWatch tool.

People wait in line for a chance to speak with prospective employers during a City of Los Angeles career fair offering to fill vacancies in more than 30 classifications of jobs on November 2, 2023 in Los Angeles, California.

The US economy added 199,000 jobs in November, according to Bureau of Labor Statistics data released Friday.

The unemployment rate fell to 3.7% from 3.9% the month before.

Economists were expecting net job gains of 180,000 for the month and for the unemployment rate to hold steady.

“We’re expecting to see moderate growth” in the November jobs report, said Karin Kimbrough, LinkedIn’s chief economist. “And if our own data is any predictor, we’re actually thinking that it’s going to be a slightly underwhelming number.”

Economists polled by Refinitiv anticipate employment growth of 180,000 jobs last month — but their estimates range from 100,000 to 275,000.

Hiring sign outside a Kate spade store in the Soho neighborhood in New York on November 11.

The market will be closely watching the revisions for September and October to see if job gains have been weaker (or stronger) than previously thought. 

The November report will likely get bumps from the return of striking autoworkers and actors. The BLS strike report shows that strikes ended in November for 25,300 UAW workers at the Big Three and 16,000 SAG-AFTRA workers.  

October’s 150,000 net gain was among the smallest monthly gains seen in the past three years; however, monthly payroll gains remain well above the neutral rate of 70,000 to 100,000 jobs needed to keep up with population growth. 

“For the last 10 months or so, jobs numbers have been revised downwards by an average of over 30,000,” said Julia Pollak, chief economist at online job site ZipRecruiter. “If we see more downward revisions, then I think many people will conclude that the labor market is even weaker than it looked initially and is cooling quite rapidly.”

Veterans meet with representatives from area employers during the Houston Veterans Job Fair, on November 30, at Minute Maid Park in Houston, Texas.

US employers announced 45,510 job cuts last month, according to data released Thursday by Challenger, Gray & Christmas. That’s a 24% increase from October but a 41% drop from a year before, when tech companies were slashing jobs after bulking up during the pandemic.

Year to date, companies have announced plans to make 686,860 job cuts, according to the Challenger report. Outside of 2020, that’s the highest January-through-November total since 2009, when 1.24 million cuts were announced.

First-time claims for unemployment benefits, considered a proxy for layoffs, ticked up to 220,000 for the week ended December 2, according to Department of Labor data released Thursday.

Also, while first-time claims for unemployment benefits remain low, Labor Department data also indicates that people are staying unemployed for longer.

Continuing claims, filed by people who have received at least one week of unemployment benefits, have steadily marched higher in recent weeks and hit a yearly high of 1.925 million in mid-November. As of November 25, they dipped to 1.861 million.

While that exceeds the historically low continuing claims seen in 2019, it remains well below longer-term averages.

Amazon associates work to ship out orders during Cyber Monday at the Same-Day Delivery Facility Fulfillment Center on November 27, in Tampa, Florida.

A a time when multiple forces and crises — wars, geopolitical tensions, the pandemic’s lingering aftershocks, high inflation and steep borrowing costs — weigh on global growth, there have been few bright spots.

The US economy is one of them. Gross domestic product in the United States grew at a remarkable 5.2% in the third quarter, ahead of China, long the engine of global growth.

“The US has really outperformed relative to other countries for the past year,” Innes McFee, chief global economist for Oxford Economics, told CNN.

The United States has powered ahead of the European Union, the United Kingdom, Japan, Canada and other advanced economies this year.

The IMF now expects US GDP to expand by 2.1% this year and 1.5% in 2024 — more than double the growth rates forecast for the UK economy and well ahead of the euro area, which is predicted to grow 0.7% this year and 1.2% next year.

Much of that growth has been powered by consumer spending. And while Americans have tapped their piggy banks excessively during the past couple of years, savings accounts in other countries have been left relatively untouched.

Additionally, the United States has not yet felt the full impact of higher interest rates. Mortgage holders and corporate borrowers typically have to refinance less frequently in the United States than in other countries, resulting in monetary policy taking longer to feed through to the economy.

Read more here.

A view from US Federal Reserve Building in Washington DC, on June 14.

The labor market is “very much being held back by high interest rates,” said Julia Pollak, chief economist at online job site ZipRecruiter, noting the effects of the Federal Reserve’s inflation-battling monetary policy tightening.

“Talk to any property investor and they say they’re not building because of high borrowing costs and low valuations … talk to manufacturers, and despite the various incentives and despite the huge amount of spending on factories, hiring is not really growing.”

As such, many investments are not going to reach their potential until rates come down, she said. The Fed has raised its benchmark lending rate to the highest level in 22 years in a monthslong battle to bring down inflation.

“Employers are saying that they hope and expect business activity to pick up in the back half of 2024,” she added.

“The unstated assumption there is that inflation will continue to come down, and the Fed will be able to start cutting rates.”

Jerome Powell, Chairman of the US Federal Reserve, speaks during the 24th Jacques Polak Annual Research Conference at the International Monetary Fund (IMF) Headquarters in Washington DC, on November 9.

Investors have mostly concluded that the Federal Reserve is done hiking interest rates, and are already looking toward rate cuts next year, possibly as early as in the first half of 2024.

Fed Chair Jerome Powell says: Not so fast.

“Having come so far so quickly, the [Fed] is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced,” Powell said last week at a moderated discussion at Spelman College in Atlanta.

“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease,” he said.

At the central bank’s next policy meeting on December 12-13, the Fed is widely expected to hold interest rates steady at a 22-year high for the third consecutive meeting.

In this year’s seven Fed meetings so far, the Fed has hiked rates four times and held them steady three times. December’s Fed meeting will likely bring that to an even split for this year.

Read more here.