US job growth sluggish; average earnings up, though
January 06, 2017 – Unemployment rate in United States of America inched up to 4.7% [previously 4.6%] in December 2016. 156,000 new jobs were added to US job market. Analysts were expecting Nonfarm Payrolls above 175K. The actual figure released by US Department of Labor show slower than expected employment growth, but 156K isn’t a bad figure. Jobs market in USA is still looking strong; the increase in Average Hourly Earnings suggests so. The average hourly earnings in December 2016 increased to 0.4%.
This is a huge improvement especially if you compare it with November’s -0.1% figure. As you might already know, the jobs market in USA is one of the key areas that Fed is keeping a close eye on. They have hinted that they might increase interest rate two or three times in 2017. If Fed are going to do that, the jobs market in USA needs to stay strong; otherwise, Federal Reserve will likely keep interest rate at current level.
“The Trump administration is likely to spend money on infrastructure. He has promised to spend money on building/upgrading roads, bridges, schools, highways, airports, etc. If Trump keeps this promise, then this will add many new jobs to the US economy. It looks like the US economy is going to stay strong. It seems unlikely that today’s data will turn USD bearish,” said David Kareem, working as the chief executive for a major finance advisory firm.
More than 2,000,000 new jobs were added in US economy in 2016. This might not seem like a lot but believe me, this is huge recovery in US jobs market. After the great recession, many believed that it would take more than a decade for US economy to recover. But, the growth in US economy is moving up much faster; the jobs market is healthy and GDP is moving up. One of the most encouraging figures in today’s data is the average hourly earnings. Thanks to December’s 0.4 percent increase, the annual increase in average income in USA has increased by almost three percent!
Mr. Trump is inheriting a solid economy from Obama’s administration. Can his administration sustain this bullish economy growth? Well, if he plays his cards right, he might end up improving these conditions even further. At this moment, US dollar is strong; in fact, it became the strongest currency moments after NFP and other data came out. The data helped push back GBP/USD to 1.23000 [from 1.24000] and EUR/USD to 1.05300 [from 1.06000.]