5 Dec 2014
US non-farm payrolls rise an impressive 321K – ING
Rob Carnell of ING notes that US non-farm payrolls rose by a much stronger than expected 321K, contrary to much of the employment data which indicated towards a soft print.
Key Quotes
“Non-farm payrolls for November rose by a much stronger than expected 321K (cons +225K, ING f +215K), contrary to much of the monthly employment data, which had indicated a softening, and also unusual because the trend for payrolls has recently been very tight, and close to the three month moving average of about 230K. There were also upwards revisions to the previous month, which now stands at 243K from 214K, and 44K upwards revisions over that and the previous month combined.”
“There is no doubt that this is an impressive figure, and will give the hawks at the Fed a bit more fire in their bellies at the next FOMC meeting. But the detail of the release is a bit less impressive on further inspection. The household survey rose only 4K. And as a result, the unemployment rate went nowhere, staying at 5.8%.”
“Also, despite some anecdotal evidence to suggest wages are finally beginning to rise, there was scant evidence of this, with the year-on-year rate of wages growth rising to only 2.1% from 2.0%, despite a chunky-looking 0.4%mom increase. This one will merit continued watching, as another monthly rise like this will really start to pull wages growth out of the rut they have been in for many years. Moreover, although the wages figures were a touch disappointing, they were partially offset by much stronger hours worked figures, and this may be an early harbinger of better wages figures in the months ahead.”
“Financial markets will rightly treat these figures as strong, and bond yields should rise and the USD should show some further strength. But the underlying story is probably not as good as the headline numbers suggest, and we may see some of the immediate market moves retrace relatively quickly.”
Key Quotes
“Non-farm payrolls for November rose by a much stronger than expected 321K (cons +225K, ING f +215K), contrary to much of the monthly employment data, which had indicated a softening, and also unusual because the trend for payrolls has recently been very tight, and close to the three month moving average of about 230K. There were also upwards revisions to the previous month, which now stands at 243K from 214K, and 44K upwards revisions over that and the previous month combined.”
“There is no doubt that this is an impressive figure, and will give the hawks at the Fed a bit more fire in their bellies at the next FOMC meeting. But the detail of the release is a bit less impressive on further inspection. The household survey rose only 4K. And as a result, the unemployment rate went nowhere, staying at 5.8%.”
“Also, despite some anecdotal evidence to suggest wages are finally beginning to rise, there was scant evidence of this, with the year-on-year rate of wages growth rising to only 2.1% from 2.0%, despite a chunky-looking 0.4%mom increase. This one will merit continued watching, as another monthly rise like this will really start to pull wages growth out of the rut they have been in for many years. Moreover, although the wages figures were a touch disappointing, they were partially offset by much stronger hours worked figures, and this may be an early harbinger of better wages figures in the months ahead.”
“Financial markets will rightly treat these figures as strong, and bond yields should rise and the USD should show some further strength. But the underlying story is probably not as good as the headline numbers suggest, and we may see some of the immediate market moves retrace relatively quickly.”