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Home > Economics > Jobs report preview: Expect a cooler December

Jobs report preview: Expect a cooler December

Jan. 7, 2020 by Joseph Brusuelas

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After a blowout jobs report in November, we expect things will have cooled off a bit when the December jobs figures are released on Friday.

We expect a net gain of 145,000 in December hiring with downside risk linked to late-year seasonal adjustments and a slower pace of hiring. This slower pace is implied by the economic data within the ISM Service Sector report and an accelerating pace of contraction within the ISM Manufacturing survey.

The unemployment rate will most likely hold steady at 3.5%, while average hourly earnings advance 0.3% on the month and 3.1% on a year-ago basis.

Given events in the Middle East, we do not expect the market to place as much emphasis on the year-end report. Rather, we would anticipate that once investors digest the report, they would remove risk from the table by midday to avoid event risk over the weekend.

Moreover, given the revisions to the household survey, there will most likely be some interesting insight on the total level of employment, unemployment by level of education and ethnicity, and the overall unemployment rate, though these are not likely to move the markets.

One particular evolution in the data will be the prime age level and percentage of employment of those 25 to 54, especially women in that cohort which stands at 76.5%, near an all-time high.

Should the level of participation continue to increase, this would perhaps indicate that it is time for the economic community to lift its estimate of the break-even rate of jobs growth to well above the consensus of 100,000 per month.

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Filed Under: Economics Tagged With: jobs report, Joseph Brusuelas

About Joseph Brusuelas

@JoeBrusuelas

Joe Brusuelas, “chief economist to the middle market,” is the preeminent voice championing issues and policies facing midsize companies in the United States and around the world. An award-winning economist, Brusuelas has more than 20 years’ experience analyzing U.S. monetary policy, labor markets, fiscal policy, international finance, economic indicators and the condition of the U.S. consumer.

A member of the Wall Street Journal’s forecasting panel, Brusuelas regularly briefs members of Congress and other senior officials regarding the impacts of federal policy on the middle market and the factors by which middle market executives make business decisions. He also frequently offers his insights on the U.S., Canadian and global economies in the financial media. In 2020, he was named one of the 100 most influential economists by Richtopia.

Before joining RSM in 2014, Brusuelas spent four years as a senior economist at Bloomberg L.P. and the Bloomberg Briefs newsletter group, where he co-founded the award-winning Bloomberg Economic Brief. Earlier in his career, he was a director at Moody's Analytics covering the U.S. and global economies for the Dismal Scientist website. He also served as chief economist at Merk Investments L.L.C. and chief U.S. economist at IDEAglobal.

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