US December non-farm payrolls +199K vs +400K expected


  • Prior was +210K
  • Estimates ranged from +150K to +720K
  • Two month net revision K
  • Unemployment rate 3.9% vs 4.1% expected
  • Prior unemployment rate 4.2%
  • Participation rate 61.9% vs 61.8% prior (was 62.8% pre-pandemic)
  • U6 underemployment rate 3.9% vs 7.8% prior
  • Average hourly earnings +0.6% m/m vs +0.4% expected
  • Average hourly earnings +4.7% y/y vs +4.2% expected
  • Average weekly hours 34.7 vs 34.8 expected
  • Change in private payrolls +211K vs +365K expected
  • Change in manufacturing payrolls +26K vs +25K expected
  • Long-term unemployed at 2.0m vs 2.2m prior (vs 1.2m pre-pandemic)
  • The employment-population ratio, at 59.5% vs 59.2% prior (61.1% before pandemic)
  • Full report

The household survey showed a very sunny picture of the labor market with unemployment falling and the employment-to-population ratio improving. That’s in contrast to the headline, which is disappointing once again.

It’s tough to reconcile mediocre jobs growth since September in contrast to the rapid decline in unemployment. There’s plenty of fuel here to believe whatever you like but all the evidence I see points to robust hiring everywhere.

The market reaction has been choppy but the dollar is rising in the latest move. I strongly suspect that’s due to the 0.6% monthly rise in wages. That’s the kind of thing that makes the Fed worry that it’s behind the curve.



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