What Do Employment Numbers Mean For More Rate Cuts?
Both the unemployment rate, at 4.2 percent, and the number of unemployed people, at 7.1 million, changed little in November. These measures are higher than a year earlier, when the jobless rate was 3.7 percent, and the number of unemployed people was 6.3 million, which may have implications for the mortgage industry.
Among the major worker groups, the unemployment rate for Blacks (6.4 percent) edged up in November. The jobless rates for adult men (3.9 percent), adult women (3.9 percent), teenagers (13.2 percent), Whites (3.8 percent), Asians (3.8 percent), and Hispanics (5.3 percent) showed little or no change over the month.
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.7 million in November. This measure is up from 1.2 million a year earlier. In November, the long-term unemployed accounted for 23.2 percent of all unemployed people.
The labor force participation rate, at 62.5 percent, changed little in November and has remained in a narrow range of 62.5 percent to 62.7 percent since December 2023. The employment-population ratio, at 59.8 percent, also changed little over the month but is down by 0.6 percentage point over the year.
MBA SVP and Chief Economist Mike Fratantoni said, “Although payroll employment rebounded in November with a gain of 227,000 jobs, and the prior months were revised upwards by a cumulative 56,000 jobs, the report overall shows more softening in the labor market. The unemployment rate is now above 4.2%, the household survey again showed a large drop in employment, and more households reported spells of long-term unemployment. Per the JOLTS results from October, the hiring rate continues to decline. While we are not seeing a pickup in layoffs, new entrants and individuals who lose jobs are having a more difficult time regaining employment.
“The payroll gains continue to be concentrated in just a few sectors, government, health care, and leisure and hospitality. The rebound followed a net loss of private sector jobs in October with the impact of the hurricanes. Wage growth remained steady at 4% on an annual basis.
“Fed officials have pointed to their ‘data dependence’ when it comes to decisions about future rate cuts. These data support a cut at the December meeting, and MBA forecasts that the Fed will continue to reduce short-term rates in 2025, although they are likely to slow the pace of cuts,” concluded Fratantoni.
The Place for Lending Visionaries and Thought Leaders. We take you beyond the latest news and trends to help you grow your lending business.
