Shockingly slow job growths Vs unemployment dive

In November, The US economy created 210K jobs, a shockingly low number compared with the expected 550K. And this is the weakest increase since January.

This indicator noted a close correlation with the dynamics of new coronavirus cases, which are also at their highest since the beginning of the year in the USA.

Shockingly slow job growths Vs unemployment dive - 1

Average hourly earnings rose by 0.3%, maintaining the annual rate of 4.8% and falling short of expectations of a rise to 5.0%. It will not be surprising if policymakers comment in the coming days to raise the question of whether the recovery is losing steam. This is a negative surprise for the dollar as it reduces the pressure on the Fed with accelerated unwinding and faster rate hikes.

The unemployment rate and the share of the economically active population, measured differently, contrasting sharply with the data above, marking a significant improvement. The unemployment rate has collapsed from 4.6% to 4.2%. This is a return to the multi-year norm, indicating a full labour market recovery. Notably, however, the economically active population has risen to 61.8%, indicating that the fall in unemployment is not the result of a shrinking labour force.

Shockingly slow job growths Vs unemployment dive - 2

Traditionally, markets pay more attention to month-on-month changes in employment numbers, but in this case, the effect of this extremely weak NFP data is balanced by a healthy, low unemployment rate.

Alex Kuptsikevich

Financial market professional with 16-years' experience and Senior financial analyst at FxPro. Author of daily reviews on the impact of economic events with comments regularly featured in top international and Russian media. Covers fundamental analysis, global markets, foreign exchange market, gold, oil, cryptocurrencies.

Alex Kuptsikevich is a regular contributor to both digital and print media including CNBC, Forbes, Reuters, MarketWatch, BBC and Coindesk.