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US Nonfarm Payroll Change 199k (consensus 180k) in Nov-23

- The US nonfarm payroll change in November 2023 exceeded expectations by 19k to reach 199k.
- The unemployment rate for November fell by 0.2pp to 3.7%, indicating a shockingly robust labour market.

When Rising Real Rates Are Not Dovish

• Some unrealistically academic policymakers worry that rising real rates from disinflation will excessively tighten monetary conditions. We firmly believe they are mistaken.
• Cost shocks eroded disposable income, but this real income and expenditure squeeze is fading. The income channel is far more important than the interest rate one.
• Uncertain policymakers should rely more on the data than misapplied theories. Resilient demand and persistent inflation would tell them to wait longer before cutting.

By Philip Rush