Friday's jobs report is the test of a December rate increase

The Fed does not meet this week, and the case for a December rate increase still runs through the employment report due Friday, Nov. 6.

Voters go to the polls on Tuesday, and Apple reports on Monday. The employment report is the one that speaks to the December rate.

Friday's jobs report

The U.S. Federal Reserve, led by Chairman Kevin Warsh, held its benchmark rate in a range of 3.75% to 4% on Oct. 28, by a 10-2 vote. Governor Lisa Cook and Cleveland Fed President Beth Hammack preferred a quarter-point increase.

The rate-setting committee said economic activity is expanding at a strong pace, that job gains have kept pace with the workforce, and that the unemployment rate has changed little. Inflation, it said, remains elevated. More information would help it decide how to get inflation back to 2%.

There is no decision this week. The next meeting is Dec. 8-9, and officials will publish new forecasts with it. On Oct. 30, interest-rate futures put the chance of a quarter-point increase at that meeting at roughly 76%, CNBC reported. The figure comes from CME Group's FedWatch, which reads those futures.

September hiring was soft. Employers added 29,000 jobs, the U.S. Bureau of Labor Statistics reported on Oct. 2, after an average monthly gain of 45,000 over the prior 12 months. The bureau also revised July and August down by a combined 60,000.

The unemployment rate changed little, and stood at 4.2%. Average hourly earnings rose 0.1% in September and 3.0% over the year.

The committee's description still fit those figures. Job gains had kept pace with the workforce, unemployment had changed little, and inflation remained elevated. Soft hiring, on that description, has not taken a December increase off the table.

Alberto Musalem, president of the Federal Reserve Bank of St. Louis, said on Oct. 30 that another rate increase will need to happen soon, CNBC reported. The labor market, he said, has been "remarkably stable and balanced," and 4.2% unemployment sits at the median of Fed officials' longer-run projections. Inflation is "too high."

"I judge that additional firming of monetary policy will be necessary, and soon," Musalem said.

The October report, out Nov. 6 at 8:30 a.m. ET, carries hiring, the unemployment rate and wages. They do not all point the same way.

The 65,000 jobs forecasters expect, with unemployment steady at 4.2%, would leave the Fed on track for more rate increases in the months ahead, Bloomberg reported Sunday. A much smaller gain is what cut those odds last time. On Oct. 2, payrolls rose 29,000 against a median forecast of 90,000, and that miss eroded expectations for an increase in October or in December, Bloomberg reported.

Unemployment is the figure the committee called little changed. A rate that holds at 4.2% would match that line. A rise would not.

Wages are the inflation piece. They rose 0.1% in September, and the committee still called inflation elevated. A faster monthly gain would reinforce that case for another increase. Another gain as small as September's would look like the month the committee already had, and two officials wanted an increase on Oct. 28 anyway.

Nov. 6 is not the last reading before the Fed meets. The bureau has scheduled the November employment report for Dec. 4 and October consumer prices for Nov. 10, both at 8:30 a.m. ET.

Apple and AMD

Apple's conference call Monday at 5 p.m. ET covers its fiscal fourth quarter, the three months through the last Saturday of September. Apple is the second-largest holding in both Invesco QQQ Trust, Series 1, QQQ, and the State Street SPDR S&P 500 ETF, SPY.

Bloomberg's analyst consensus, as Yahoo Finance reported Sunday, is earnings of $2 a share on $113.46 billion in revenue, against $1.85 and $102.46 billion a year earlier. The preview put early iPhone 18 sales at the center. For a holder of either fund, Monday is about whether that demand is holding up, and what Apple says about the quarter ahead.

QQQ fell 3.5% on Oct. 30. Reuters reported that disappointing results from Intel and Amazon sparked that session's tech selloff and amplified worries about spending on artificial intelligence. Advanced Micro Devices, or AMD, fell 10.9% that day, and VanEck Semiconductor ETF, SMH, fell 7.0%.

AMD reports Tuesday after the close, with its call at 5 p.m. ET. For a holder of SMH, that is the next reading on chip demand after Intel's weak outlook.

Tuesday's midterms

The midterm election is Tuesday, Nov. 3. There is no single hour when a national result arrives.

Wall Street expects Democrats to take the House of Representatives, CNBC reported on Oct. 30. In an Oct. 27 report, Wolfe Research, a New York securities firm, surveyed 138 investors and found that 96% expected Democrats to win House control, CNBC reported.

"A blue House is the obvious consensus base case," Wolfe said.

That means a House controlled by Democrats.

The Senate is closer. In the same survey, 58% expected Democrats to take the Senate. Wolfe itself put that chance at 49%.

A Democratic House with President Donald Trump still in office is divided government, not a new law this week. His veto would block major Democratic policies, CNBC noted. Divided government typically makes it harder to fund the government and to raise the debt ceiling, the legal cap on federal borrowing, and a standoff or a first-ever default could be particularly damaging, CNBC reported.

The same split makes large new spending packages less likely, "a dynamic the market typically enjoys," CNBC said. The Bipartisan Policy Center expects the United States to reach the debt limit between late winter and mid-summer 2027, CNBC reported. Tuesday changes who bargains over that later fight. It does not settle it.

A Democratic Senate is a separate question for the Fed. Analysts at TD Securities said Democrats winning the Senate could ease concern about the central bank's independence, because Fed nominees need Senate confirmation, CNBC reported.

The Bank of England

The Bank of England announces its decision Thursday at noon in London, 7 a.m. ET, and publishes new forecasts with it. Bank Rate is 3.75%. The Independent reported Sunday that traders widely expect a rise to 4%, the first increase since August 2023, after inflation rose to 3.5% in September, the highest in 11 months.