The Independent Market Observer

Jobs Report Preview: Will We Get a Miss?

Posted by Brad McMillan, CFA®, CFP®

Find me on:

This entry was posted on Nov 30, 2022 12:24:56 PM

and tagged Commentary

Leave a comment

jobs reportIt’s time for the monthly jobs report preview, which is worth doing for a few reasons. First, it lets us consider the most important driver of the economy both for history and for the immediate data. Second, it makes us think about our expectations. And third, of course, it will be in the headlines.

Expectations Are Down

Everyone seems to be banking on a slowdown, with average estimates around a gain of 200,000 jobs, down from 261,000 the previous month. The unemployment rate is expected to tick up, from 3.7 percent to 3.8 percent, and the average hours worked to stay steady at 34.5. In other words, expectations are for a continuation of the slowdown we have been seeing for most of this year. Given the ADP report this morning, which came in at 127,000, well below last month’s 239,000 and well below expectations of 200,000, the risk appears to be to the downside. In other words, expectations are down, and a miss—maybe a large one—is certainly possible.

What would that mean? Well, for the headlines, we could certainly expect hyperventilating about how the economy is crashing and a recession is imminent, as we have seen many times before. But even if we get a miss? I think that conditions remain positive. And as an investor, no real reaction would be warranted to your portfolios.

Bad News Not a Big Deal?

There are two main reasons for this. The first is that even with a weak report, the economy would continue to grow. One month’s data is not indicative, and we often see bad months followed by good months. Even if we did see a weak month, as of this morning’s JOLTS report, there are still more than 10 million open jobs out there. Even if we did see a weak month for job creation, total labor demand remains steady given the stability of the average hours worked number. Finally, even if we do get a weak month, that “weak” month would still be at or close to the levels usually seen in an expansion. In other words, this would be a return to normal from the abnormally good job growth since the pandemic and not something to worry about.

From a market perspective, there would also be reasons to remain calm. With wage growth still elevated, the total purchasing power would continue to grow faster than jobs. Indeed, consumer spending has held up well. Companies’ top lines should continue to grow. And with slower job growth, presumably the Fed would be getting what it wants, which will help mitigate some of the future rate increases, which will also support markets. As long as markets are driven by rates and inflation, bad news can be good news as far as the economy is concerned. A miss might actually be good for markets. That is the big picture: bad news is possible, but it wouldn’t be a big deal.

Could We Get a Miss?

Expectations for job growth are down, and there is a good chance of a miss. If we do get a miss, though, it won’t mean that much as it will leave the economy still growing and close to normal expansionary levels. In fact, if a miss helps on inflation, it could actually help boost markets. So what happens with the jobs report on Friday is very much up in the air, with slower growth expected, and it could be worse. But in the big picture, the net result will not be something to worry about.

Could we get a miss? Yes. Should we pay attention? Yes, indeed. Should we worry about it? Not even close.

Keep calm and carry on.

Subscribe via Email

New call-to-action
Crash-Test Investing

Hot Topics

New Call-to-action



see all



The information on this website is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets.

The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. All indices are unmanaged and investors cannot invest directly in an index.

The MSCI EAFE (Europe, Australia, Far East) Index is a free float‐adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of 21 developed market country indices.

One basis point (bp) is equal to 1/100th of 1 percent, or 0.01 percent.

The VIX (CBOE Volatility Index) measures the market’s expectation of 30-day volatility across a wide range of S&P 500 options.

The forward price-to-earnings (P/E) ratio divides the current share price of the index by its estimated future earnings.

Third-party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided on these websites. Information on such sites, including third-party links contained within, should not be construed as an endorsement or adoption by Commonwealth of any kind. You should consult with a financial advisor regarding your specific situation.


Please review our Terms of Use

Commonwealth Financial Network®