NFP: Labor market generally remains solid – Wells Fargo
Data released today showed that during December the US economy added 145K jobs, below the 164K expected. According to analysts at Wells Fargo, the data shows that the labor market remains solid. They see Federal Reserve policymakers likely remaining on hold in the short-term.
“Payroll increases in December were generally broad based with 57 percent of industries adding jobs. In that regard, job gains were paced by retail trade (41K), leisure & hospitality (40K) and education & healthcare (36K). But construction added 20K jobs in December, the largest monthly increase in eight months.”
“Despite the 50-year low in the unemployment rate, there has not been a significant spike in wage increases in this expansion. That said, the 3.1% rise in real disposable income on a year-ago basis in the September/November period continues to support solid growth in real personal consumption expenditures.”
“The December labor market report shows that the labor market generally remains on a firm foundation. Employment gains have averaged 184K per month over the past three months. Although not quite as strong as a year ago, this pace of gains is solid. The unemployment rate remains at a 50-year low, and wages continue to increase. Policymakers at the Federal Reserve likely will look at today’s data and conclude that there is no compelling reason to change monetary policy. Solid gains in nonfarm
payrolls means that the Fed does not keep to rate cuts, but benign growth in wages argues against tighter monetary policy.”