Work Kermitments

Kermit hammering an American typewriter

Image source: Fenton one - Shutterstock, reddit - Giphy

What's going on?

Data out Friday showed that the US economy added 266,000 jobs in November – beating investors’ expectations by 45% and capping off a very cheery week. Sheesh!

What does this mean?

Everyone expected the US to add more jobs in November than October, when numbers were driven down by a massive strike at General Motors. But almost no one expected things to be this good. What’s more, October’s numbers were revised up – the US actually added 28,000 more jobs than previously thought. All that’s brought the unemployment rate back down to 3.5%, its lowest in 50 years.

China also lifted tariffs on some US soybean and pork imports on Friday – indicating that a resolution to the trade war may be in store. Taken together, investors’ fears of an economic slowdown have been significantly assuaged: they duly sold off “safe-haven” investments like government bonds in favor of stocks.

Why should I care?

For markets: The Federal Reserve isn’t sold just yet.

November’s US employment data also revealed that wages grew 3.1% compared to 2018. That, combined with buoyant consumer sentiment, suggests that the US is in for a good holiday season: people have money, and they’re ready and willing to spend it (tweet this). For now, however, that hasn’t fed through to inflation – the US central bank’s other main concern. It’s therefore likely to keep interest rates steady when it meets later this month. If fatter wallets eventually lead to higher prices, however, a rate hike could be on the horizon.

For you personally: Uh-oh.

As wages creep up and unemployment falls, employers struggling to hire new people could turn elsewhere. While automation isn’t always cost-effective when wages are low, it might soon get more attractive for some. That could become a problem for those in easily automated jobs – although by improving productivity, it could also boost the economy overall.

Originally posted as part of the Finimize daily email.

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