Non-farm data is out. In November, the seasonally adjusted non-farm employment population in the United States increased by 64,000, exceeding the market's general expectation of 50,000. The unemployment rate in the United States in November recorded 4.6%, above the expected 4.4%, the highest since September 2021.

Let's talk about my understanding of contradictory data.

Why have job openings increased while the number of unemployed people has also increased?

This is similar to participating in a large game of 'musical chairs.' We can look at what happened in this game from three perspectives.

1. Different statistical methods: counting 'chairs' vs counting 'heads.'
This is the most critical reason. The U.S. government has two groups of people using different methods to calculate the numbers.

The first group of people (business survey) is counting 'chairs' (positions): They ask the boss, 'How many salaries did you issue?'.

This creates a loophole: If you work during the day in a company and drive for a ride-hailing service at night to support your family, you occupy two chairs and receive two salaries. In the eyes of the first group of people, this counts as two employment positions.

The current reality is: Due to high prices, many people do not have enough money and are forced to take a second job. Data from November shows that the number of people forced to take side jobs has surged by about 910,000. This makes the 'number of positions' appear to have increased (by 64,000), but this does not mean that more people have found jobs; it just means that the original people are working more.

The second group of people (household survey) is counting 'heads' (unemployment rate): They directly call homes and ask, 'Do you have a job?'.

No matter how many jobs you work, you are just one person.

The current reality is: those recent graduates or those who have just been laid off and want to find a new job are finding it impossible to grab a chair. Although the total number of chairs (positions) has slightly increased, it is prepared for those who are already playing the game (part-time), and not for newcomers. Therefore, the number of unemployed people has increased.

2. The growth rate is too slow: the speed at which chairs are added cannot keep up with the number of people entering.
Every month in the United States, many young people graduate or immigrate to the United States, and these people are like new players joining the game.

Economists have calculated that in order for everyone to have a seat, the United States must add at least 100,000 to 150,000 chairs every month.

But in November, only 64,000 chairs were added.

The result is: although the number of chairs has indeed increased (+64,000), there are more new players, and the remaining people who did not grab a seat have become the 'unemployed population', causing the unemployment rate to rise from 4.4% to 4.6%.

3. Only specific areas are hiring: only 'emergency rooms' and 'construction sites' are adding chairs.
These 64,000 new positions are not being created across all industries, but are extremely specialized:

Healthcare industry (+46,000): Hospitals are short of nurses and caregivers, which is a necessity, and hiring must continue regardless of the economy.

Construction industry (+28,000): Because the government previously approved many road and factory projects, construction is still ongoing, so workers are needed.

Other industries are withdrawing chairs: If you are neither a doctor nor a construction worker, for instance, if you work in logistics or in a government department, you will find that positions are actually decreasing (transportation industry down by 18,000, federal government down by 6,000).

This is like: although the number of workstations has increased (everyone is working overtime and part-time), the number of people without food has also increased. This is usually a signal that the economy is starting to worsen, and people's lives are becoming tighter.

So this time's non-farm data, from another perspective, should actually be understood as a small 'positive' message.

Because the employment data has not changed significantly, it will indirectly affect the Federal Reserve's pace of interest rate cuts tomorrow.

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