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Jobs Up, Unemployment Down in November

US payrolls increased by 199,000 in November, while the unemployment rate (U-3) dropped to 3.7%, compared to the expected 3.9%. Additionally, the U-6 rate declined to 7%, underscoring a stronger jobs report.


Payroll gains in November were more widespread than in October, as indicated by the rise in the diffusion index to 63.4%. The majority of these gains were in Health Care (+77k) and government (+49k), while manufacturing added 28k jobs, mostly due to strike-related returns. Excluding the volatility related to these strikes, the trend seems to be slowing, albeit not at a significant pace.


Our take: This data should help to alleviate speculation about rate cuts for the next year and reduce the downward pressure on yields. While the report is unlikely to alter expectations for the upcoming FOMC meeting, it is marginally risk-negative, as financial conditions are likely to tighten in response to these developments.



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