(Finance) – The US Bureau of Labor Statistics (BLS) has announced that, in the month of December, in the non-agricultural sectors, an increase of 216 thousand new jobs was recorded, a figure higher than consensus expectations (+170k new jobs). The unemployment rate stands at 3.7% (expectations at 3.8%). The figures for recent months have been significantly revised downwards (-71 thousand jobs in total compared to previous estimates). The October figure was revised downwards by 45 thousand units to +105k, that of November by 26 thousand units to +173k. The labor force participation rate stood at 62.5% (still a far cry from February 2020 levels when it stood at 63.3%). Average wages rose by 0.4% m/m (consensus +0.3%). Wages rose by 4.1% y/y (consensus +3.9%, previous month at +4% y/y). This is the picture of US labor market (data on Non Farm Payrolls) traced by Filippo Diodovich, senior market strategist at IG Italia.
“The figures on December job market – notes Diodovich – highlighted excellent job creation compensated by significant downward revisions of previous months (-71 thousand new jobs). Month-to-month and year-over-year wage growth remains strong and should discourage “dovish” members of the Federal Reserve from advocating a possible advance of a cut in the cost of borrowing in the United States.”
“The numbers on the US labor market they shouldn’t in our opinion – he continues Diodovich – bring particularly strong movements on the financial markets despite an initial strengthening of the dollar. The Federal Reserve’s choices will depend on upcoming data on inflation, consumer inflation expectations and the trend in worker wage growth. Only if the disinflation process continues in the coming months is there a concrete possibility that the FED could consider a first cut at its March meeting. Our expectations are more conservative and are set for a first reduction in interest rates by the FED only in May.”
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