Federal Reserve Building, Washington, D.C.
The Fed is likely to stay on track to tighten monetary policy early next year despite Friday's report of a weak gain in jobs, CUNA and NAFCU economists said.
The U.S. Bureau of Labor Statistics reported:
- The nation gained 210,000 jobs from October to November after seasonal adjustments. The nation had a seasonally adjusted 148.6 million non-farm jobs in November.
- October's non-farm gain was revised upward to 546,000 jobs from the previously reported 531,000 jobs.
- November's unemployment rate was 4.2%, down from 4.6% in October, in the household survey.
CUNA senior economist Dawit Kebede said the non-farm jobs gain was smaller than expected but the unemployment rate had a "marked decline … a sign of continued recovery."
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The labor force participation rate was 61.8% in November, up from 61.6% in September and October, and up from 61.5% a year ago.
Dawit Kebede Kebede said the rise in the participation rate shows "a return to work by some who opted out due to COVID fears or lack of childcare. Emergence of the new variant Omicron, which is more transmissible than Delta, could derail progress in labor market and exacerbate supply chain disruptions if cases continue to rise."
Kebede said the persistence of rising inflation has led Federal Reserve Chair Jerome Powell to signal he is open to ending the large-scale asset purchase program sooner than anticipated.
"Although the economy is not yet at maximum employment, a declining unemployment rate is a step in the right direction to fast track those changes," Kebede said.
NAFCU chief economist Curt Long said the report was a "mixed bag," but is unlikely to change the Fed's plan to begin ending its bond purchasing program next year.
Curt Long Long said the BLS household survey showed a huge drop in the unemployment rate and a significant rise in labor force participation. However, its separate survey of businesses found the 210,000 gain in jobs, "which fell well short of expectations."
"It may take another month to truly determine what happened in November, but this does not change much from the Fed's standpoint, as they eye liftoff in the first half of 2022," Long said.
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Jim DuPlessis
Jim covers economic data trends emerging for credit unions, as well as branch news and dividends.
