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October US NFP slightly softer than expected - ING

FXStreet (Łódź) - James Knightley from ING suggests that despite the fact that the US jobs report for October came in slightly lower than consensus, the story on the US economy remains positive.

Key quotes

"Payrolls rose 214,000, which was a little softer than the 235,000 consensus, but there was a net 31,000 upward revision for the last two months so in that respect the jobs number is pretty much in line with what was expected."

"There was better news from the household survey which reported that 683,000 jobs were created in the month, which helped nudge the unemployment down to 5.8% - it was last at this level in July 2008. Underemployment also fell nicely to stand at 11.5% while the proportion of people employed rose to 59.2%, the highest rate since 2009."

"The one real disappointment was on the wage front. Average hourly earnings continue to grow at just 2% YoY despite the employment cost index report suggesting that worker compensation costs are rising. Nonetheless, with unemployment continuing to fall, thereby shrinking the pool of available labour, we expect wages to eventually respond."

"While today’s report is unlikely to have any major market implications, the underlying story for the household sector remains very positive. With employment rising nicely, gasoline and mortgage rates plunging and equities hitting new highs we should expect to see ongoing strong readings for consumer confidence and spending, which bodes well for 4Q GDP growth. Moreover, with the Eurozone and Japanese central banks continuing to provide aggressive stimulus, the positive US dollar environment looks set to continue."

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