Topline: With the U.S. Labor Department set to release its monthly jobs report on Friday, Wall Street will be watching the numbers closely to get a gauge of the economy’s momentum and see whether the stock market can finish the year strong, despite ongoing headwinds from tariffs and slowing global economic growth.
Here’s what to expect from the November figures, according to market experts:
- November will likely see solid job growth, with economists polled by Dow Jones forecasting 187,000 jobs added last month—one of the highest preliminary estimates this year, thanks to a temporary boost from General Motors autoworkers, who returned to work after weeks of striking for better wages.
- The consensus on the unemployment rate is that it will remain unchanged from last month, hovering at 3.6%.
- “One of the key data points that will determine whether we get a recession sometime next year is whether job growth continues,” says Brad McMillan, chief investment officer for Commonwealth Financial Network. “If we get something like the expected gains, that would be very positive for the economy and the markets through the rest of the year.”
- “While the official consensus is around 180,000 jobs added, we’ll likely see tempered expectations going into tomorrow’s numbers,” predicts Mark Freeman, chief investment officer at Socorro Asset Management.
- “If we get a drastic number—like below 100,000 jobs, that might prompt a larger market reaction,” Freeman says, pointing out that consumer spending and holiday sales numbers remain positive, which should reassure Wall Street investors.
- Factor in the returning GM workers (since they aren’t new jobs), and the jobs numbers don’t look “nearly as good,” McMillan points out. “That slowdown seems to be the real story, even if we match expectations.”
Key background: The U.S. economy added a much better-than-expected 128,000 jobs in October, with the unemployment rate at 3.6%—near a 50-year low. But some of the recent jobs data has been confusing, CNBC points out: The latest weekly unemployment claims dropped to a seven-month low, even as recent ADP data showed private-sector jobs in November grew at the slowest rate—by just 67,000—in six months.
Crucial quote: “If China tariffs go into place on December 15, the second half of the month won’t be much fun and we’ll likely see some real volatility—it won’t be as cheerful of a holiday season,” Freeman predicts. “If Trump holds off on tariffs, we’ll see the stock market’s positive momentum carry into year-end.”
Chief critic: “Make no mistake about it, however, monthly average job growth in 2019 is running 26% below the pace seen this time last year,” says Mark Hamrick, senior economic analyst at Bankrate.com. “We’d need to see a major development of some kind to change this slower trajectory.”
What to watch for: Trump is set to decide whether to hold off on the next round of U.S. tariffs, scheduled to kick in on $156 billion worth of Chinese goods starting December 15.