By Scott J. Brown, Ph.D., Raymond James
The Employment Outlook – The November Employment Reports was a bit disappointing. Nonfarm payrolls rose by 245,000 (vs. a median forecast of 485,000). The increase was held back by the loss of 93,000 temporary census workers. State and local government continued to shed workers. Seasonal hiring was much lower this year, which showed up as a decline in adjusted retail jobs. The pace of improvement in the labor market has continued to slow following a sharp pickup in the late spring and summer. The current surge in COVID-19 cases is leading some states government to re-impose restrictions on in-person services, but self-isolation for individuals with health concerns is expected to restrain the recovery into early 2021. The arrival of vaccines should help to boost economic growth and the job market in the second half of the year.
This Week – The economic calendar thins and investors will be more focused on COVID-19 and the prospects for federal fiscal support. The Consumer Price Index is expected to reflect a dip in gasoline prices (which normally rise in November). Core inflation should be moderate. Virus-related supply chain issues have added to input costs, but there appears to be little pass-through to the consumer. Pipeline pressures may be more noticeable in the PPI report.