November was a chilly month for jobs, relatively speaking, of course. “Only” 263,000 new jobs were created by employers. That was the slowest pace of adding payroll costs in almost two years. (Yes, it is best to put quotes around the word only in that last sentence because a month with 263,000 new jobs would have been considered a red-hot number in the decade before the COVID-19 pandemic.)
Companies slowed their appetite to add workers while also announcing thousands more planned layoffs in November, led by more than 52,000 announced layoffs by tech firms, according to Challenger, Gray and Christmas. That’s a 20-year high as the chill set-in for the technology sector.
December and January tend to be popular months to announce job cuts. Companies are rushing to make an annual budget or reshape one as it begins.
The markets will take the temperature of the latest jobs data in the week ahead.
The Job Openings and Labor Turnover Survey — better known by its verb-inducing acronym JOLTS — will be released Wednesday. Like other readings on the job market, it is a lagging indicator. This week’s report will cover November, so it is far from a real-time read on labor demand. Nevertheless, its count of job openings and layoffs will give investors a sense of the resiliency of the job market.
Then on Friday, the December jobs report hits the tape. The employer data will be scrutinized for evidence of the recent spike in announced layoffs. That may be offset by holiday hiring, however, muddying the job market picture for investors and the Federal Reserve. A cooler hiring climate will feed recessionary worries. Still, no recession since the 1970s has started with the economy adding more than 200,000 jobs each month. Meantime, employee pay hikes have been sticky, averaging over 5 percent in 2022. That helps consumers battle 7 percent inflation, but also helps fuel 7 percent inflation.
This week’s jobs data won’t deter the Fed from continuing its inflation fight with higher interest rates early this year. Yet signs of cooling employment will heat up calls for a pause soon.
