Treasury prices have settled to unchanged on the day an hour following the release of the December jobs report. Global equities are extending this week’s gains with no major headlines driving activity (Nikkei +0.9%, Hang Seng +0.3%, Euro Stoxx +1.0%), and the S&P 500 is up 0.4% in early trading. U.S. stocks are trading higher today despite what most consider to be a subpar jobs report (S&P 500 now +1.7% on the week).
Nonfarm payrolls added 148,000 jobs in December, and the net revision for the prior two months was -9,000 jobs. The headline growth number was solid, but at the same time, it was 42,000 below market expectations. A greater focus in recent months has been the wage growth data provided in this establishment survey. Average hourly earnings rose 0.3% in December, as expected, but many are also focusing on the downward revision to the November figure (0.2% to 0.1%). On a year-over-year basis, wage growth rose to 2.5% (as expected), and the average workweek was unchanged at 34.5 hours. In the household survey, the headline unemployment rate was unchanged at 4.1%, with household employment and the official labor force rising by 104,000 and 64,000, respectively. The U-6 underemployment rate did tick higher from 8% to 8.1%.
The monthly jobs reports are always (over)hyped in the markets. The skeptic (and former sell-side participant) in me would suggest this hype is fueled in the street (dealer community) by an incentive to increase trading volumes. This is not meant to be totally dismissive of the importance of the data provided, but as we often say, one month is not a trend. That’s not to mention the fact that there are several other metrics that can/need to be used to assess the health of the labor market and overall economy. That’s not to say that there aren’t reasonable criticisms of current economic conditions (there are), but job growth hasn’t been one of them for several years.
Jason Haley
Managing Director, Investment Management Group
| Date | Event | Surv(M) | Actual | Prior | Revised |
| 01/02 | Markit US Manufacturing PMI | 55 | 55.1 | 55 | — |
| 01/03 | MBA Mortgage Applications | — | 0.70% | -3.50% | — |
| 01/03 | Construction Spending MoM | 0.50% | 0.80% | 1.40% | 0.90% |
| 01/03 | ISM Manufacturing | 58.2 | 59.7 | 58.2 | — |
| 01/03 | ISM Prices Paid | 64.5 | 69 | 65.5 | — |
| 01/03 | ISM New Orders | — | 69.4 | 64 | — |
| 01/03 | ISM Employment | — | 57 | 59.7 | — |
| 01/03 | FOMC Meeting Minutes | — | — | — | — |
| 01/03 | Wards Total Vehicle Sales | 17.50m | 17.76m | 17.35m | 17.40m |
| 01/03 | Wards Domestic Vehicle Sales | 13.35m | 13.72m | 13.38m | 13.46m |
| 01/04 | Challenger Job Cuts YoY | — | -3.60% | 30.10% | — |
| 01/04 | ADP Employment Change | 190k | 250k | 190k | 185k |
| 01/04 | U.S. Govt Delayed Opening, Jobless Claims Lockup is Canceled | ||||
| 01/04 | Initial Jobless Claims | 240k | 250k | 245k | 247k |
| 01/04 | Continuing Claims | 1928k | 1914k | 1943k | 1951k |
| 01/04 | Markit US Services PMI | 52.5 | 53.7 | 52.4 | — |
| 01/04 | Markit US Composite PMI | — | 54.1 | 53 | — |
| 01/04 | Bloomberg Consumer Comfort | — | 51.8 | 52.4 | — |
| 01/05 | Revisions: Seasonally Adjusted Household Survey data | ||||
| 01/05 | Change in Nonfarm Payrolls | 190k | 148k | 228k | 252k |
| 01/05 | Two-Month Payroll Net Revision | — | -9k | — | — |
| 01/05 | Change in Private Payrolls | 193k | 146k | 221k | 239k |
| 01/05 | Change in Manufact. Payrolls | 18k | 25k | 31k | — |
| 01/05 | Unemployment Rate | 4.10% | 4.10% | 4.10% | — |
| 01/05 | Underemployment Rate | — | 8.10% | 8.00% | — |
| 01/05 | Average Hourly Earnings MoM | 0.30% | 0.30% | 0.20% | 0.10% |
| 01/05 | Average Hourly Earnings YoY | 2.50% | 2.50% | 2.50% | 2.40% |
| 01/05 | Average Weekly Hours All Employees | 34.5 | 34.5 | 34.5 | — |
| 01/05 | Labor Force Participation Rate | — | 62.70% | 62.70% | — |
| 01/05 | Trade Balance | -$49.9b | -$50.5b | -$48.7b | -$48.9b |
| 01/05 | ISM Non-Manf. Composite | 57.6 | 55.9 | 57.4 | — |
| 01/05 | Factory Orders | 1.10% | 1.30% | -0.10% | 0.40% |
| 01/05 | Factory Orders Ex Trans | — | 0.80% | 0.80% | 1.20% |
| 01/05 | Durable Goods Orders | — | 1.30% | 1.30% | — |
| 01/05 | Durables Ex Transportation | — | -0.10% | -0.10% | — |
| 01/05 | Cap Goods Orders Nondef Ex Air | — | -0.20% | -0.10% | — |
| 01/05 | Cap Goods Ship Nondef Ex Air | — | -0.10% | 0.30% | — |