Zero Hedge
February 2, 2018
While Wall Street did expect a whisper number above the consensus forecast of 180K, the big question for today’s payrolls report was what would average hourly earnings – that critical leading indicator for inflation – do. Well, according to the BLS, while January payrolls did indeed beat, rising by 200K, above consensus…
… it was the average hourly earnings that slammed expectations, rising by 2.9% Y/Y (and up 0.3% M/M, exp. 0.2%) well above the 2.6% expected, and the highest print since Jun 2009.
However, it important to note that the only reason hourly earnings rose as much as they did is because the average weekly hours worked dropped sharply from 34.5 to 34.3. Meanwhile the average weekly earnings actually declined from 2.9% to 2.6%, with the number dropping from $919.43 in December to $917.18.
Elsewhere, the unemployment rate kept constant at 4.1%, as expected.
Going back to payrolls, the change in total nonfarm payroll employment for November was revised down from +252,000 to +216,000, and the change for December was revised up from +148,000 to +160,000. With these revisions, employment gains in November and December combined were 24,000 less than previously reported. After revisions, job gains have averaged 192,000 over the last 3 months.
In kneejerk response, Bill Gross just said that the jobs report “should send the 10Y yield to 3%”, and the report ensures the “Fed will continues to hike.”
Summarizing the report’s key details:
- A d v e r t i s e m e n t
- U.S. Jan. Nonfarm Payrolls Rose 200k;
- Avg. hourly earnings Y/y 2.9%, prior 2.7% est. 2.6%
- U.S. Nonfarm private payrolls rose 196k vs prior 166k; est. 181k
- Manufacturing payrolls rose 15k after rising 21k in the prior month; economists estimated 20k, range 10k to 30k from 19 economists surveyed
- Unemployment Rate at 4.1%
- Unemployment rate 4.1% vs prior 4.1%; est. 4.1%
- Participation…