Read the highlights of this week’s commentary from Helios:
- The US labor market was resilient in November, with 227,000 jobs added. The unemployment rate edged up from 4.1% to 4.2%, reaching the highest level of long-term unemployment in nearly three years. Analysts note that while job growth rebounded in November, the broader trend indicates a weakening labor market, further strengthening the case for additional Fed rate cuts.
- In November, US services activity expanded at the slowest pace in three months as businesses face uncertainty regarding the incoming administration’s policies, with a decline in new orders hinting at a slowdown in demand. Although respondents described business conditions as “normal,” many noted hiring freezes and a reluctance to fill vacancies, signaling a softer labor market than last year.
- The preliminary December consumer sentiment index rose to its highest level in seven months. This revealed a sharp post-election divide as Republican sentiment surged to 81.6 from 69.1 and Democratic sentiment fell to 70.9 from 81.3. Republicans anticipate slowing inflation, while Democrats fear proposed tariffs could drive inflation higher. While Republicans’ post-election optimism boosted overall sentiment, such boosts historically last only four to six months.
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