We expect headline payrolls rebounded to 275k in November. One-off factors which weighed on the October report likely reversed this month, leading to a strong number. Upward revisions to October are also likely to be significant. We expect Oct's 12k no might be revised upwards to 75k. Service-sector surveys have shown a pickup in employment, with the ISM services employment subindex rising to a 14-month high of 53.0. The Conference Board labor differential (the difference between respondents who say jobs are plentiful and those who say jobs are hard to find) has also trended higher for the past two months. We expect the unemployment rate declined modestly, but remained at 4.1% in rounded terms. We expect AHE rose 0.3% m-o-m, a slight slowdown from the recent run rate. A report in line with our expectation would confirm that weakness in October was temporary. Trend job gains continue to cool, but the unemployment rate is likely to stabilize in the low-4s and to be well below the 4.4% Q4 average the Fed forecast in its September's SEP. Wage growth is moderating, but the pace remains elevated, which should lead to lingering inflation pressures within super core services. Easing concerns about downside risks in the labor market should allow the FOMC to remain patient on rate cuts. Recent inflation data have been elevated, and risks are skewed higher in the near- and medium-term. We expect policy will remain on hold at the December meeting, followed by just two 25bp cuts in CY 2025.
