New Starter

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What's going on?

Data out on Friday showed that the US added far fewer jobs than expected last month, and the country hasn’t even been introduced to a certain disruptive young go-getter yet.

What does this mean?

Squint hard, and there are silver linings here: the unemployment rate fell to 4.2% last month from 4.6% in October, while the proportion of people either in work or looking for it reached its highest level since March 2020. But after better-than-expected jobs numbers in October, economists had dared to dream that November would see a big uptick in new workers. It didn’t: the US added just 210,000 jobs last month – the smallest gain this year and a massive 62% less than analysts were expecting (tweet this).

Why should I care?

The bigger picture: Will they, won’t they?
Friday’s data has put the Federal Reserve (the Fed) in a tricky spot: the central bank has been thinking about winding down its bond-buying program faster than planned, but this update might cause its confidence to waver. Not least because this data was collected before Omicron was discovered, so any damage the new variant might do to the jobs market – either through more restrictions or by discouraging people from working – is yet to come. The Fed, then, could just make matters worse if it ends up withdrawing economic support too quickly.

For markets: Don’t get distracted.
Investors are side-eyeing Omicron nervously, but the US stock market is actually staying relatively stable. There’s a more pressing concern, in that a number of popular individual stocks have seen their prices plunge recently. Just look at renowned investor Cathie Wood’s ARK Innovation ETF, which tracks a host of retail investor favorites and is down 17% more than the wider market since the start of November. Some analysts reckon this could be a sign of things to come, and that the collapse of those stocks could be just as dangerous as Omicron to the wider market.

Originally posted as part of the Finimize daily email.

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