US payrolls rose 165,000 in October against a 48,000 monthly average, and traders now price about a 70% chance of a Fed hike on Dec. 9. A record-low labor share and 3.6% productivity growth point to input costs, not wages, as the source of the inflation problem.
EndGame Macro flags that October’s 165,000 payroll rebound came with a 339,000 jump in involuntary part-time work, a pattern that historically preceded hours cuts turning into layoffs. Source
Friday's October jobs report showed payrolls up 165,000, against a 12-month average gain of 48,000, according to the Bureau of Labor Statistics (BLS). Unemployment was little changed at 4.1%. Revisions added a combined 84,000 to August and September, which wipes out much of the weakness in the 29,000 September print that had briefly buried the case for an October hike. The two-year Treasury yield climbed as much as 7 basis points to 4.54%, and Bloomberg reported traders pricing roughly a 70% chance of a quarter-point increase on Dec. 9.
