Rate cut odds jump on rise in the unemployment rate

Payrolls grew by 227k, just above the estimate of 220k with the private sector contributing 194k of them. The prior two months were revised up by a combined 56k. The negative was the 355k job loss in the household survey and combined with a drop of 193k in the size of the labor force, the unemployment rate rose one tenth to 4.2%. Of the 355k job decline, 204k lost came from the key 25-54 yr old cohort and 194k from those aged 55 and over.

On the service side, private education/health and state and local government continues to drive a lot of the job gains, contributing a combined 112k. Leisure/hospitality added 53k after just 2k in the month before (which we know is all distorted by the storms/strikes). Temp jobs added 2k after a drop of 33k and have mostly trended down over the past year. Retail saw a job loss of 28k as the main drag on job growth. Manufacturing employment rebounded from the Boeing strike resolution. Construction added 10k.

The birth/death model added 5k jobs vs 4k in November 2023 and a loss of 13k in November 2019. So it remains very possible, and most likely, that the B/D model is still overstating job gains, as it was over the past few years.