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Monday, 6 February 2017

US jobs growth steady

Jobs growth steady

An apparently much stronger result for US nonfarm payrolls, with the economy adding +227,000 positions in January, figures which related to before the inauguration.

Although the headline result easily beat expectations there was a significant downward revision for November, which saw the change in total nonfarm payroll employment adjusted from +204,000 to +106,000 for that month. 


There were also adjustments to the total employment figures to reflect Census counts, but the totals still show a record 76 consecutive months of job gains under President Obama.


The US economy added a solid 2.1 million jobs in 2016, with a 2017 off to an even brighter start (if, that is, you’re happy to overlook the November revision).


Earnings stall

The weaker aspect to this report was the modest increase in average hourly earnings of only $0.03 to $26.00.


Year-on-year growth in earnings dipped accordingly to 2.5 per cent.


The unemployment rate was up a notch at 4.8 per cent, but assuming employment growth continues tracking within its present range, this is uptick is probably just noise. 


The wrap

Only the slower growth in earnings could explain a shift in bets against an imminent interest rate hike.

Overall, though, the result was a beat on expectations, and as full employment approaches it is expected that inflation will pick up.