Latest Jobs Report Comes in Stronger Than Expected
Yields saw a decline continuing into Wednesday as the ADP Employment change fell softer than anticipated. However, a slight yield reversal occurred on Thursday as Initial Jobless Claims aligned with analysts’ projections.
After a week of somewhat expected news, market attention is now fixed on the eagerly awaited Nonfarm Payroll numbers. This report is widely hailed as the most reliable gauge of the US labor market's health. In recent weeks, markets anticipated that this week's labor market reports will demonstrate to the data-dependent Fed that policy is effectively moderating economic pace. But, those predictions did not align with the latest numbers. Net job gains came in at 199,000, which was 19,000 higher than Economists estimate of 180,000. The unemployment rate was expected to stay steady at 3.9 percent, but November saw it drop to 3.7 percent.
These numbers could lead to the Fed maintaining rates at cycle highs, and may dampen rate cut expectations.