Select Page

Job Growth Moderates Amidst Employer Caution and Worker Stability

Employers are becoming more cautious, leading to a reduction in job postings and a slowdown in hiring. Conversely, employees are displaying increased loyalty by staying put rather than swiftly pursuing better opportunities elsewhere.

This caution and stability are evident in federal jobs reports, showcasing employment growth that remains robust historically but has scaled back significantly from the remarkable surges witnessed in the initial stages of the pandemic economic recovery.

October witnessed a net increase of 150,000 jobs by US employers, resulting in a slight uptick in the unemployment rate to 3.9%, as per the Bureau of Labor Statistics.

November likely followed a similar pattern, although with added contributions from striking autoworkers and actors re-entering the workforce, as indicated by BLS data.

Economists, in alignment, predict that the impending jobs report, scheduled for release, will unveil a growth of 180,000 positions in employment and an unchanged jobless rate of 3.9%, according to Refinitiv.

If November’s job gains meet expectations, the pace of growth would parallel pre-pandemic figures. Between 2010 and 2019, a span that witnessed an unprecedented 100 months of consecutive job growth, an average of about 183,000 jobs were added each month.

Last month, economists had foreseen 180,000 jobs being added, but the actual figure fell short by 30,000 positions.

A significant event impacting October’s employment figures was the strike initiated by the United Auto Workers union against major automakers – Ford, General Motors, and Stellantis. This strike, occurring from mid-September through October, led to a reported loss of 33,200 jobs in the motor vehicles and parts industry, as stated by the BLS.

The strike report for October highlighted 25,300 workers from Ford, GM, and Stellantis participating in the strike. Additionally, November’s BLS report indicated the end of strikes for 16,000 SAG-AFTRA workers after an agreement between the actors’ union and Hollywood studios in the early part of the month.

The upcoming report may offer insights into whether the labor market is stabilizing or experiencing a more pronounced cooling effect. ADP’s private payrolls report earlier in the week revealed a modest gain of 103,000 jobs and slower wage growth, falling short of economists’ expectations of 130,000 jobs.

While attention will naturally focus on the headline figures of payroll numbers, unemployment rates, and wage gains in the Friday report, the significance of data revisions cannot be overlooked, as highlighted by Pollak in conversation with CNN.

Dow ekes out win as Alphabet, AMD rally offsets energy slump

The Dow closed just higher Thursday as a tech-led rally underpinned by Alphabet and AMD offset losses in energy stocks ahead of the monthly jobs report due Friday.

By 16:00 ET (21:00 GMT), the benchmark S&P 500 had climbed 0.80%, the 30-stock Dow Jones Industrial Average had moved up by 0.2%, or 18 points, and the tech-heavy Nasdaq Composite had risen by 1.4%.

Alphabet Inc Class A (NASDAQ:GOOGL) rose more than 5% a day after the company unveiled its latest AI model Gemini. The new multi-model AI system, which understands audio, photos and video, comes as tech giant looks to take the fight to rivals OpenAI, Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:META).

Chip stocks also supported the broader tech sector, racking up a nearly 3% gain, underpinned by a surge in Advanced Micro Devices.

Advanced Micro Devices Inc (NASDAQ:AMD) rose more than 9% after launching its new AI chip MI300X as the chipmaker takes the fight to Nvidia (NASDAQ:NVDA).

AMD’s management sees”MI300X performance surpassing NVDA H100 for AI workloads,” Oppenheimer said in a note.,

Retail investor-favorite (NYSE:AI) slumped nearly 11% after the AI application software group guided for a full-year adjusted operating loss of $115 million to $135 million, deeper than its prior forecast of $70 million-$100 million.

Chewy (NYSE:CHWY) shares fell nearly 1% after the online pet-care retailer trimmed its annual sales outlook due to inflationary pressures that have dented customer demand.

GameStop (NYSE:GME) shares were 10% higher after approving a plan to amend its investment policy, allowing the video game retailer to invest in equity securities. The news overshadowed quarterly results that missed on the top line.

Data on Thursday showed that the number of Americans who filed for first-time unemployment aid came in at seasonally-adjusted 220,000 last week, marking a slight uptick from 219,000 for the week ended on Nov. 25. Economists had expected a reading of 222,000.

The latest figures added to string of recent data pointing to soft labor market, though the nonfarm payrolls report for November will take center stage.

Economists expect that the economy created 180,000 new jobs last month, with the unemployment rate likely steady at 3.9%. Average hourly earnings, however, are expected to have increased by 0.1%.


Lululemon Faces Tightened Belts and Shrinking Profits in Gloomy Holiday Outlook

Lululemon Athletica Inc (NASDAQ:LULU) foresees a less-than-zen fourth quarter, expecting revenues and profits that won’t match the lofty expectations. This hints at a tough holiday stretch, with shoppers cinching their wallets tighter, shunning lavish clothing and accessories.

The Vancouver-based company enjoyed a yoga-stretch level of demand for its comfy wear previously. Yet, with the cost of living doing its own stretching, some of its customers are opting out of splurging on luxury threads.

This somber forecast from Lululemon echoes sentiments shared by big-league U.S. retailers like Kohl’s (NYSE:KSS), setting the stage for a potentially turbulent kickoff to the festive shopping season.

Lululemon eyes fourth-quarter net revenue within the $3.14 billion to $3.17 billion range, with expected profits ranging from $4.85 to $4.93 per share—figures that fall short of analysts’ predictions, as per LSEG data.

Ah, investing on a Friday—a daring dance with the market before the weekend’s curtain call. It’s like buying tickets to a show you hope will be a smash hit, with the added thrill of uncertainty and the promise of a Monday morning review. Will your investments be the star of the show or take an unexpected plot twist? Fridays in the investing world are like the opening act of a captivating weekend saga—a blend of excitement, anticipation, and the faint aroma of coffee fueling those last-minute decisions.