Jobs & Fed higher for longer with 3.7% unemployment & 199k new Nov jobs
The U.S. job market remains strong with 3.7% unemployment and 199k new jobs in November.
This means the Fed will mostly likely repeat its ‘higher for longer’ inflation-fighting rate stance after its final 2023 rate policy meeting next week.
The unemployment rate dropped from 3.9%, and the resilient new jobs figure was helped by striking auto workers getting back to work.
The Fed’s nearly two-year rate hike campaign has helped to bring CPI inflation down to 3.2% now from a June 2022 peak of 8.9%, and their stance of keeping rates higher for longer is to ensure we don’t reverse course.
The Fed’s inflation target is 2%. We don’t need to get all the way to 2% for the Fed to stop hiking overnight bank-to-bank rates, ease its rate stance, or cut these rates. But we do need to get into the 2% range.
We’re close, but not there yet.
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Reference:
– The job market was hotter than expected in November (BI)
– And kudos to BI on their nice, clean charts