Yesterday’s unemployment report was ok at the headline level, and more of a mixed bag under the surface. The unemployment rate is now 4.2% with the U6 at 7.8%. Payrolls were 227k for the month, with 33k coming from the government, which in the context of the new administration may be the last time we see a positive number in that category. The participation rate was lower, at 62.5%, which always helps to make the unemployment rate look better. But perhaps the most interesting part came from the difference between the BLS survey, and the household survey made to citizens that are part of a broader scope (not limited to unemployment). As you can see below, they go in opposite directions, which may indicate that the numbers may not be trusted. The overall takeaway of this report is that it was bad enough for the odds of a rate cut in December to go up to 89%, which was good enough for equities to wrap up the first week of December with gains.
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