Payrolls Beats But Wages Miss

The U.S. November jobs report showed the headline payrolls were largely in line (178,000 versus 170,000 expected) and hourly earnings missed (-0.1% versus an expected 0.2% increase) that defied the pattern of upside surprises in recent economic reports, though the remainder of the jobs data tracked assumptions, and with only small prior revisions. The unemployment rate dropped to the lowest since August 2007. The bellwether goods sector posted a 17,000 jobs gain, though the goods sector hours-worked fell 0.3%, while overall hours-worked rose 0.1% with a 34.4 work week as expected, with no revisions. There was a 160,000 civilian employment rise despite a 226.000 labor force drop that left a cycle-low 4.64% jobless rate and a 62.7% participation rate. The report implies a modest trimming in prospects for the remaining November reports, but will do little to change the overall outlook for gross domestic product (GDP) in Q4 or in the year ahead.