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Last week’s U.S. employment data showed that the job market is still strong.
U.S. total non-farm payrolls increased by 199,000 in November, compared with consensus expectations of about 185,000 to 190,000. The increase in the previous two months was revised down by 35,000.
Private payrolls increased by 150,000. Within the sectors, education and health service jobs was the biggest increase – up by 99,000 in November. From that group, 93,200 payrolls are healthcare and social assistance jobs.
The increase of 28,000 jobs in the manufacturing sector came from about 30,000 returning auto strike workers.
The data “failed to provide evidence of a meaningful deterioration,” wrote Christopher Wood, head of Equity Strategy at Jefferies, but the quit and the temporary employment data continue to show a softening labor market.
The number of quits in the U.S. declined from a peak of 4.5M in November 2021 to 3.63M in October.
Employment in the temporary help services sector also declined by 13,600 in November and is now down to 261,000, or 8.2% since 3.17M in March 2022.
“Real labor market weakness will only come if SMEs (small and medium-sized enterprises) start retrenching,” wrote Wood.
In addition, the November NFIB (National Federation of Independent Business) small business survey, published on Tuesday, shows that a net 18% of small business owners are planning to create new jobs in the next three months, and a net 30% of small businesses are planning to raise wages, up from 24% in October.
The average interest rate for small business loans is up 9.3% in November from 9.1% the month prior, but down a peak of 9.8% from September.
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