Markets Ended Last Week Generally Higher

A stronger-than-expected jobs report helped drive stocks mostly higher last week and raise optimism of an interest rate cut when the Federal Reserve meets later in December. Consumer discretionary, communication services and information technology helped drive the market, which was otherwise tempered by downturns in energy, utilities, real estate and materials. Long-term bond prices were relatively stable, with yields on 10-year Treasuries slipping 2.0 basis points from the prior week’s closing mark. Crude oil prices declined on demand fears despite OPEC+’s decision to extend production cuts until the end of 2026. The dollar inched higher, while gold prices dipped lower.

Employment Grew in October

As anticipated, the labor sector recovered from severe weather and strike activity in the previous month. Employment rose by 227,000 in November following upward revisions to both September (+32,000) and October (+24,000). Employment increased by an average of 186,000 per month over the 12 months prior to November. The unemployment rate, at 4.2%, rose by 0.1 percentage points, while the number of unemployed increased by 161,000 to 7.1 million. These measures are higher than a year earlier, when the jobless rate was 3.7%, and the number of unemployed people was 6.3 million. The labor force participation rate was 62.5%, 0.1 percentage points lower than the October estimate.

Eye on the Week Ahead

November inflation data is available this week with the releases of both the Consumer Price Index (CPI) and the Producer Price Index (PPI). October saw the CPI rise 0.2% for the month and 2.6% for the year, while the PPI ticked up 0.2% for October and 2.2% for the year.