Non-farm employment and unemployment rate are "at odds" again, personal employment status worsens, future inflation is likely to rise and difficult to fall
Data released by the U.S. Bureau of Labor Statistics shows that non-farm employment increased by 227,000 in November, and the unemployment rate rose to 4.2%. Although job and wage growth exceeded expectations, the rise in the unemployment rate has raised market concerns, leading to an increase in the probability of a rate cut in December from 60% to 80%. This contradictory non-farm report reflects deeper economic worries
On December 6th, Friday, the U.S. Bureau of Labor Statistics released data showing that the U.S. added 227,000 non-farm jobs in November, exceeding expectations of 220,000 and up from the previous value of 12,000; the unemployment rate in November was 4.2%, surpassing expectations and last month's 4.1%; the average hourly wage growth year-on-year and month-on-month reached 4% and 0.4%, both exceeding the expected 3.9% and 0.3%.
This is a non-farm report that appears contradictory at first glance: on one hand, employment exceeded expectations, and wage growth also surpassed expectations; on the other hand, the unemployment rate is rising beyond expectations.
The market's interpretation of this data leans towards "negative": after the data release, the probability of a rate cut in December rose from previously over 60% to more than 80%.
Chart: Market pricing of December rate cut probability
The "conflict" between non-farm employment and the unemployment rate is not just a matter of different statistical criteria; it reflects deeper economic concerns