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November jobs report: Non-farm payrolls undershoot expectations by over 300,000

The Yahoo Finance Live anchors discuss how the November jobs report stacks up against estimates.

Video Transcript

JULIE HYMAN: Just want to go through some of the other details of the reports before we get to some more discussion of that. And just wanted to revisit the headline numbers because it is such a surprising report-- 210,000 jobs added, very well short of the 550,000 consensus estimate. And by the way, that 210, I don't think there were any estimates that low that I was looking-- I was looking at the dispersion and estimates this morning, I don't think I saw any that low.

And again, we had a revision, a little bit higher the prior month. Unemployment rate coming in at 4.2% so that's actually a better number interestingly even as the participation rate just ticked up by a tenth of 1%. Average hourly wages also very interesting 4.8% increase. What does that mean? What are the implications of that? To me, at least in some part, the implications of that are though-- are that even though we are seeing inflation tick up, real costs for real people, wages are not ticking up at a very speedy pace here, even as we see things like food costs going higher.

Brian Cheung, I want to bring it to you first because of what I was saying about the Fed implications here. How should we be reading this report through that lens?

- Yeah, well, within the context of the Federal Reserve who had been signaling, basically up until this report that they were essentially going to seriously consider quickening their tapering process to maybe set themselves up for more pull forwarding of their interest rate hikes in 2022, Yeah, indeed if you're looking at this report and you're going, Yeah, I wonder if I want to revisit that call. But on the other hand, when it comes to Fed communications, once the cat's out of the box it's kind of difficult to put it back in there again.

And I think for the Federal Reserve, even though I'm sure this is a disappointing report from the top line number, I think a lot of Fed officials likely would have liked to see something closer to the half million range in terms of monthly returns.

Especially when you consider that 4.2 million at least before the support shortfall between current payroll levels and pre-pandemic levels, then the Federal Reserve might still be saying, you know what, well, even though this is a bit disappointing, it's not a contraction in any way. The labor market is still at least bringing people back in and for that reason, we've already communicated only a week and a half before the next meeting that this is likely what we're going to do. So we can't necessarily just pull a pivot here and try to pull the rug out from under the markets based off of what we've been seeing over the past few days.

And I think one other thing that's complicating things is not even necessarily the data itself, but just the calendar because that next Fed meeting as you point out, Julie is December 15. There's about seven or eight day blackout period ahead of that which begins really, essentially tomorrow where the Fed will not be able to have official speak publicly. So even if they wanted to rethink this, they couldn't say anything anyway. So I think with the communication they've already put out this week, really the train may have already left the station on perhaps a faster taper.

BRIAN SOZZI: Yeah, here's my flash analysis here. At first I thought the headline would mean that taper is not off the table obviously, but maybe it's not as quick as some would think. But again, I think what you highlighted, Julie with that wage growth 4.8% to me that is inflationary, and I think that only feeds this narrative-- this more hawkish narrative we heard from the Federal Reserve this week and I would argue, guys, that is bearish for stocks. Bearish for stocks.

JULIE HYMAN: Well, we'll see how it turns out to be over the course of.

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