Despite What Wall Street Tells You, Actual Jobs Data Gives Fed No Reason To Slow Tightening

The Wall Street captured financial “news” media blasted us with the usual misinformation in the wake of Friday’s nonfarm payrolls report. The big guns of financial infomercials blasted us with the notion that the reported gain of 155,000 jobs in November “missed” economists’ expectations. The consensus guesstimate was for a gain of 198,000.

Here’s how CNBC put it:

Job growth falls short of expectations in November: 155,000 payrolls created vs 198,000 estimate

“Markets have high expectations for a December rate hike, but a slowdown in hiring in November appears to give Fed officials some room to slow down their hiking path next year”.

Of course, that was the seasonally “adjusted” number, which as often as bears no resemblance to what actually happened. The seasonally fudged number is subject to 2 monthly revisions and 5 annual revisions thereafter as the statisticians fit the abstraction to reality over the next 5 years.

In the meantime, we can look at the actual data right now, make a few comparisons with years past, draw a few lines, and see reality as it currently exists, without waiting 5 years for the seasonal adjustment process to be completed.

So let’s do that and see what actually happened in November and what it tells us about the stock market.

While the media kept everyone focused on the seasonally adjusted gibberish, the unmanipulated, actual data gave us a clear view of November’s performance. The total number of jobs rose by 475,000. That’s as of November 12, by the way. It’s not the full month. We have subsequent real-time tax data showing that the job market has strengthened considerably since then. I’ll get to that in a moment.

There are obviously seasonal differences in hiring, so to get an idea of how this number stacks up, we can compare it with recent past Novembers. November is the month of the biggest gains, thanks to holiday hiring so we expect a big number. The current gain was 475,000. It was well above the 10-year average of +282,000 jobs in November. It was the third-best November since 2008 trailing only 2017’s 580,000 and 2013’s 524,000.

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Gary Anderson 4 months ago Contributor's comment

Wages have been below trend for so long that running a little hot cannot hurt. Wage increases have been hotter.