The November jobs report came in well short of expectations. November saw just 39,000 new jobs and 50,000 in the private sector, compared to expectations in the 130,000-175,000 neighborhood. The revisions that make September and October appear slightly better are no consolation. Yes, the November figures will be revised twice more, but it won't be enough to counter how far short of the mark the numbers have fallen.
The unemployment rate increased to 9.8 percent as more people start looking for work. Nationally, there are 15.1 million people counted as unemployed, 6.3 million of which have been out of work longer than six months. Ouch! Further, there are 9 million people working part time who would rather have full-time work. When you add up all those unemployed, those discouraged workers that would take a job if it were available, and those working part-time for economic reasons, the unemployment rate would be 17 percent.
Mortgage rates will likely pull back as a result of this report, and the stock market won't like it, either. The folks at the Fed likely feel satisfaction that this poor report validates their renewed quantitative easing efforts. No matter what, the weight carried by the employment report means that the disappointing November results overshadow weeks' worth of other more upbeat economic releases, and it will be a blow to consumer sentiment. A retreat in mortgage rates won't necessarily trigger a wave of home purchases if prospective buyers are still nervous about the job market.