Announced this morning, the economy added 223,000 jobs in December, more than expected. The Health Care and Social Assistance industry was relatively strong, while Temporary Help remains weak. The Unemployment Rate fell to 3.5% and the Labor Force Participation Rate at 62.3% is two-tenths higher than the previous month. Average Hourly Earnings increased 0.3% in December, less than expected and less of an increase than the previous month and is 4.6% higher on an annual basis. Finally, Average Weekly Hours were 34.3, which is one-tenth lower than the previous month.
Overall, the resilient labor market continues in December with another positive headline jobs figure and a falling unemployment rate that was already low by historical standards. Average Hourly Earnings still grew, but less than the previous month, hinting at a slight reprieve from wage increases; and the participation rate moved higher. Meanwhile, the Federal Reserve is likely to keep rates higher for longer to ensure inflationary measures trend lower as they have been in recent weeks. While some companies have recently announced workforce reductions, others are reticent to let people go as it may be difficult to find workers considering the number of job openings. How and when the Federal Reserve adjusts its policy amidst these dynamics will be key for the economy in the months ahead.
Following the release of the jobs report, the U.S. 10-year treasury yield ticks slightly lower and equity futures are higher as we head into the market open.
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