Jobs report: Unemployment holds steady at 3.7%, wages rise 5.1%

Yahoo Finance’s Ines Ferre joins the Live show to break down sector job gains and other November jobs report data.

Video transcript

[AUDIO LOGO]

BRAD SMITH: Well, let's get into more of the market action off of this November jobs data with Yahoo Finance's own Ines Ferré. Ines, you've been pouring into some of these numbers here. Let's recap and see what's actually taking place here within this November's jobs report as well.

INES FERRÉ: Yeah, hotter-than-expected, to say the least, when it comes to this jobs report. 263,000 jobs that were added in November. And the expectation was to add 200,000 jobs. You see there, the unemployment rate at 3.7%, coming in line with what was expected. But average hourly wages rising by 5.1%, as Julie had mentioned. That's hotter-than-expected because the expectation was for 4.6%.

Jobs pretty much across the board, except for a couple of sectors. You saw leisure and hospitality adding 88,000 jobs in November. Health care jobs rose by 45,000. Government added 42,000 jobs. Services-- the services industry added 24,000 jobs. Even construction employment trended upwards.

Now, we did see a decline of contraction in retail trade. Those jobs declined by 30,000 in November. And also transportation and warehousing declined by 15,000 in November. So this kind of jives, goes in line with what we've been seeing in the retail space, some contraction there, in consumer discretionary, also in volumes for shipments that we have seen some of the big shipping companies talking about a decrease in volume.

Now, keep in mind, as one of your guests was talking about earlier, that this is really measuring the first half of the month, the first couple of weeks of the month. So we're not really seeing the tail end of it. Wages growing, that is a problem, of course, for the Fed because that means that the Fed will have to continue to tighten.

Labor force participation coming in at 62.1%. That's another problem. And Jay Powell this week had talked about the participation gap in the labor force, talking about also early retirements, and talking about how the stock market increasing and rising house prices gave way to more early retirements.

So how do you fix this? Well, by making the unemployment rate go up and by bringing wages down. So this is really a tale of two jobs, so to speak, when we look at this. Because we are seeing these headlines of job losses, hiring freezes, but at the same time, we are seeing some hotter-than-expected report. But it just may not be showing up yet in the numbers.

JULIE HYMAN: Yeah, and I-- there was a tweet from Liz Ann Sonders that I like, where she said, "Take that, pivot pushes." In other words, there are people who have been betting on the Fed to turn, to pivot. I mean, I think that narrative is pretty much gone now. The Fed has killed the pivot narrative, right? But this job's report just goes, again, further towards making sure that narrative is good and dead.

INES FERRÉ: Yeah, it's a lagging indicator. And we have to keep in mind that it is a lagging indicator. And what you're seeing also in the headlines are sort of the big companies, the big headlines about these layoffs. But nevertheless, in real life, I mean, you must be seeing it as well. We see this sort of the contraction in the consumer that is also pulling back as well. So it's coming, it just takes time.