November jobs report in early December is the data point the Federal Reserve has not yet received, and it may be the one that finally settles the December decision, or leaves it open until the meeting itself. The Fed decision is on December 9. Before it, the committee will receive the October jobs report on Friday, the October inflation report on November 10, and the November jobs report in early December. That last report, arriving days before the meeting, will be the freshest evidence about hiring, unemployment and wages, and it will be read with particular weight because it is the last chance for the labour market to change the committee’s mind.
The October report, forecast at about 55,000 jobs with unemployment at 4.2 percent, will set the baseline. If October is strong, November must be weak to change the December odds. If October is weak, November must be strong to restore the hawkish case. If October is mixed, November becomes the tiebreaker. That sequencing matters for markets, which price a December rise at roughly 72 to 76 percent today, and which will adjust after each report. A November report that surprises in either direction, arriving so close to the meeting, could move odds sharply, because there will be no further jobs data to correct it before December 9.
Inflation data will also shape the November jobs reading. The October inflation report on November 10, following September PCE at 3.6 percent and consumer inflation at 3.7 percent, will show whether price pressures are easing or persisting. If inflation cools while jobs weaken, the case for a hold strengthens. If inflation stays firm while jobs hold up, the case for a rise strengthens. If inflation and jobs move in opposite directions, the committee will face the same tension it faced in October, when it held in a 10 to 2 vote with two dissents favouring a rise.
Why the last report matters most
The last report matters most because of recency bias, which affects committees as much as markets. A November jobs report that shows hiring collapsing will weigh more heavily in a December 9 meeting than an October report that showed hiring steady, even if the two reports together describe a stable trend. Conversely, a November surge will erase doubts created by a soft October, even if the surge proves temporary. The Fed knows this bias and tries to look through single reports, but a report arriving days before a meeting is hard to look through, especially when the decision is already close.
The December decision data calendar also includes speeches from Fed officials, who have not spoken publicly since Chair Kevin Warsh’s press conference. Those speeches, if they come before the November report, will signal how officials are leaning, but they will not substitute for the report itself. Hammack and Cook, who dissented in favour of a rise, may explain their votes. Logan and Kashkari, who voted to hike in July, may signal whether they still favour a December move. Their words will be parsed, but the November numbers will be counted.
Planning for a late surprise
For businesses, households and investors, planning for a late surprise means not locking in a December assumption too early. A rise priced at three in four today could become a near certainty after a strong November report, or a coin flip after a weak one. Borrowing decisions, hiring plans and investment timing that assume a December rise should include a contingency for a hold, and vice versa. The Fed has told markets it will follow the data. The November jobs report, arriving last and closest to the meeting, may be the data that matters most, precisely because it arrives last.
