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US jobs report exceeds expectations

The non-farm payrolls report injected some much need volatility into the markets as the numbers were well ahead of expectations.

American flag on Wall Street
Source: Bloomberg

In December, the US added 292,00 jobs on the payrolls, and that is well ahead of the 200,000 expected, and it is worth noting that the previous month’s number was revised higher to 252,000 from 211,000. The unemployment rate held steady at 5% which also bodes well for the US economy. The participation rate ticked higher to 62.6% from 62.5%, and this is an indicator that Janet Yellen will be pleased with.

The only item that held this report back from being a very bullish announcement was the hourly earnings numbers. The month-on-month earnings number decreased while the year-on-year reading increased, and both came in below expectations

Overall the announcement helps justify the Fed’s decision to raise interest rates last month, but with underwhelming earnings figures the US central bank will be hesitant to raise rates in the near-term. The dollar was the biggest benefactor as the prospect of more rate hikes are still on the card. For the same reason gold, silver and oil dipped on the back of the report. Indices initially reacted positively to the numbers but now gains have been reversed. 

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