The November jobs report is unquestionably disappointing given the promising results in October and an improving outlook that had been buoyed by improving economic data in recent months.
Consumer confidence is slowly being restored and recent improvement in retail sales suggested that consumers have been emerging from their funk. Nonetheless, sentiment remains comparatively constrained relative to the last expansion.
While the late-summer angst surrounding a double-dip recession continues to fade, the reality of sub-par growth is still with us. Against that backdrop, we would expect to continue to see job creation, but at a frustratingly slow pace.
Today’s result is more evidence of a “two steps forward, one step back” environment that keeps consumer enthusiasm in check.
Absent greater growth, businesses seem unlikely to boost hiring until all other options have been exhausted for meeting slowly growing customer demand.
The possibility certainly exists that the unemployment rate could move higher and re-test its prior cyclical high should job creation remain lackluster as disaffected workers re-enter the job market.