12 Feb 2016
US labor market supports case for rate hike - BNP
Analysts at BNP Paribas explained that yhe labour market conditions clearly support another rate increase.
Key Quotes:
"In January, the unemployment rate dropped below 5% (to 4.9%) and wage growth was relatively strong (+0.3% for production and non-supervisory employees).
Contrasting with survey data, the manufacturing sector not only added jobs (+29kfor the month), but also the number of hours worked increased.
The upturn in the index of aggregated hours in January (+0.5%) could foreshadow a rebound in manufacturing activity.
Two factors lend credibility to this hypothesis: the strong increase in overtime work (+2.4%) and the “new orders” component of the ISM index (+2.7 points to 51.5, the highest score since summer 2015)."
Key Quotes:
"In January, the unemployment rate dropped below 5% (to 4.9%) and wage growth was relatively strong (+0.3% for production and non-supervisory employees).
Contrasting with survey data, the manufacturing sector not only added jobs (+29kfor the month), but also the number of hours worked increased.
The upturn in the index of aggregated hours in January (+0.5%) could foreshadow a rebound in manufacturing activity.
Two factors lend credibility to this hypothesis: the strong increase in overtime work (+2.4%) and the “new orders” component of the ISM index (+2.7 points to 51.5, the highest score since summer 2015)."