On the November Jobs Report

A beat in net payrolls at 227,000, on top of upward revisions of 56,000 for the prior two months. But the “household survey” contradicts this good news sharply, with a contraction of 355,000. That’s quite a mystery, considering that unemployment due to weather is now entirely at ordinary levels, implying that the 461,000 persons out of work last month due to hurricanes have all come back. A possible partial expectation is the contraction in immigrant employment in the face of a too-little-too-late attempt by the Biden administration to tighten the border and, unsuccessfully, defuse an election issue. Market expectations for no pause in Fed rate cuts came back to life after the report, having been unrealistically positioned for a pause in either December or January. Especially when CPI come is soft next week, there will be no pauses.