9 Jan 2015
US NFP risks might be for a weaker outcome – KBC
FXStreet (Barcelona) - According to KBC Bank, the slowdown in hiring and ISM momentum indicates that US NFP risks might be for a weaker outcome, with consensus expecting a 240k gain.
Key Quotes
“In November, the US payrolls report came out remarkably strong, showing a net increase in employment by 321 000, the strongest rise since early 2012. For December, a 240 000 gain is expected, well below the November reading of 321 000, but in line with the overall trend of 2014.”
“We believe however that the risks might be for a weaker outcome as hiring probably slowed after an exceptional November month. Recall that also business confidence surveys (ISM’s) showed a slowdown in the momentum in December. Especially hiring in retail and transportation probably slackened after the start of the Thanksgiving holidays.”
“Overall however, the US labour market recovery should remain on track. Besides the headline payrolls number, we look out for the unemployment rate and wage data.”
“The unemployment rate is expected to extend its downtrend in December after a stabilization in November. The unemployment rate is expected to drop from 5.8% to 5.7%. We have no reasons to distance ourselves from the consensus.”
“Additional positive news last month came from the wage data. Average hourly earnings rose by 0.4% M/M in December, the biggest monthly increase since October 2011. The annual reading however picked up from only 2.0% Y/Y to 2.1% Y/Y. For December, a more limited increase by 0.2% M/M is forecast. Another upward surprise would add to the positive news, indicating that wages are picking up.”
Key Quotes
“In November, the US payrolls report came out remarkably strong, showing a net increase in employment by 321 000, the strongest rise since early 2012. For December, a 240 000 gain is expected, well below the November reading of 321 000, but in line with the overall trend of 2014.”
“We believe however that the risks might be for a weaker outcome as hiring probably slowed after an exceptional November month. Recall that also business confidence surveys (ISM’s) showed a slowdown in the momentum in December. Especially hiring in retail and transportation probably slackened after the start of the Thanksgiving holidays.”
“Overall however, the US labour market recovery should remain on track. Besides the headline payrolls number, we look out for the unemployment rate and wage data.”
“The unemployment rate is expected to extend its downtrend in December after a stabilization in November. The unemployment rate is expected to drop from 5.8% to 5.7%. We have no reasons to distance ourselves from the consensus.”
“Additional positive news last month came from the wage data. Average hourly earnings rose by 0.4% M/M in December, the biggest monthly increase since October 2011. The annual reading however picked up from only 2.0% Y/Y to 2.1% Y/Y. For December, a more limited increase by 0.2% M/M is forecast. Another upward surprise would add to the positive news, indicating that wages are picking up.”