U.S. payroll gains likely to have stayed healthy in November

U.S. payroll gains are expected to have stayed healthy in November. Nonfarm payrolls have averaged 181,000 so far in 2016, decelerating from 2015’s average rise of 229,000 but strong enough to stimulate the U.S. Fed’s sentiment that the labor market continues to tighten. The nonfarm payrolls are expected to have increased by 165,000 in November, which might strengthen the possibility of a rate hike in December, said Societe Generale in a research report.

Moreover, a sound rate of job gains, the recent drop in underemployment is expected to convince the Fed officials that they are making good progress on fighting the remaining slack in the labor market. The payrolls had risen 161,000 in October, and the earlier two prints were upwardly revised by a combined 44,000. The slightly slower rate of rise in October relative to recent months was mostly because of an easing in the retail sector that shed 1000 jobs.

In particular, there was marked weakness in electronics and clothing store sectors. Given that October retail sales rebounded sharply, highlighting a strong bounceback in consumption, the retail category might have gained and added about 15,000 positions in November. The manufacturing sector has lost an average of 11,000 jobs per month in the last three months; however, that might have eased in November.

In the meantime, construction sector is expected to have added about 10,000 jobs, whereas the combined education and health industries might have witnessed a rise of about 45,000 positions.

“The unemployment rate may have inched down to 4.8 percent from last month’s 4.9 percent reading (4.876 percent un-rounded), while the workweek may have been little changed at 34.4 hours”, added Societe Generale.