On the November Jobs Report

263,000 payrolls is the weakest this calendar year, but it’s not a sign of recession. It’s three times more than the number of persons who age into the labor force or get a green card. The unemployment rate fell slightly. Employment in the household survey fell, another month of contradiction to the payroll survey – but on a payroll basis, the household survey shows almost the same gains. The 0.55% gain in average hourly earnings is the second hottest this year, Powell believes this is the root cause of inflation. There has been no relationship between wages and inflation (inflation has moderated a lot while wage growth has only moderated a little). Openings are down – but that’s a function of having filled them with payroll growth. With the Fed’s promise to slow down the pace of rate hikes, all that matters to policy is the continued decline of inflation.