Jobs Number in United States Misses

Alan Penny

10 January 2020

3 min read

Wall Street buildings with US flags

  • BLS numbers lower than anticipated
  • Average Hourly Gains also lower than expected
  • Within the range of comfort for traders

On Friday at 8:30am in New York trading, the Bureau of Labor Statistics released the Non-Farm Payroll figures, which is the monthly reading of jobs either added or subtracted from the United States workforce.

This is the most highly anticipated economic announcement during most months, as the United States consumer is one of the biggest drivers of global growth. That being said, Non-Farm Payroll Friday trading tends to be very volatile, and therefore it can be somewhat all over the place.

The NFP disappoints

It was expected that there would be 162,000 jobs added for the month of December, with an unemployment rate of 3.5% for that same time period. Furthermore, the Average Hourly Earnings month-over-month were expected to show a gain of 0.3%, as we continue to see the American worker continue to pick up strength as far as earning power is concerned.

the immediate reaction was to see the US dollar take a little hit

At the time of release, a headline number of 145,000 jobs added in December came out just short of expectations. The unemployment rate was 3.5% as expected, while the Average Hourly Earnings registered just 0.1%, the lowest number since July. This will be a disappointment, and the immediate reaction was to see the US dollar take a little hit.

However, the message here is not to be overly concerned; what the stock market cares about is whether or not the Federal Reserve is going to step in and protect it. It has shown itself to do so more than once, so this might end up being a “slightly bad news is good news” type of scenario. At the very least, it probably keeps the Federal Reserve on the sidelines and likely to do nothing.

The US economy pushes forward

The next step forward is that there will probably be more of the same. That’s because even though the jobs number and the unemployment rate missed a bit, the reality is that they are still positive and the economy in the United States continues to go forward.

One set of numbers doesn’t make a trend, so the fact that we missed just slightly won’t be something to be overly concerned about. With that being the case, at the very least take away the fact that the Federal Reserve is still on the sidelines and will not be interfering with the rally in the stock markets.

Ultimately, one should not expect much in the way of change going forward. There isn’t enough here to have the Federal Reserve concerned about the economy, and that means there’s very little in the way of overt negativity.

The United States still looks better than many of the other large economies around the world, and that will continue to send money into the US markets, as shown by the somewhat muted reaction to the number missing expectations.

Written By
Alan Penny

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