US growth

The Daily Update - NFPR

Today’s November non-farm payroll release showed 178,000 jobs added which was in line with expectations. The prior month’s reading of 161,000 jobs added was revised down to 142,000.  The unemployment rate fell to a nine year low of 4.6% from October’s reading of 4.9% and the participation rate dropped a little to 62.7%.  Average hourly earnings was an off setting factor to an otherwise expected and rather neutral report as month on month the -0.1% saw a 2.5% year on year number from the 2.8% previous report.

This data release in conjunction with recent Fed commentary makes a December rate rise almost inevitable with the market been pricing in a 100 percent expectation of an increase in rates.  What is more challenging to determine is what a Trump Presidency really means for growth and inflation.

The Daily Update - NFPR

Today’s October non-farm payroll release showed 161,000 jobs added which was below expectations of 175,000 jobs added.  The prior month’s reading of 156,000 jobs added was revised up to +191,000.  The unemployment rate edged lower to 4.9% from September’s reading of 5% although the participation rate also fell to 62.8%.  Average hourly earnings came in above expectations at 2.8% yoy up from 2.6% yoy in September.

The Daily Update - US growth and the New Normal

A recent paper by John Fernald, a senior researcher for the Federal Reserve Bank of San Francisco, titled ‘What is the New Normal for US Growth?’ suggests that for the US economy it could be in the range of 1.5-1.75 percent (in real terms).  The author’s preferred point estimate is 1.6 percent which he sees as being ‘consistent with productivity growth net of labor quality returning over the coming decade to its average pace from 1973–95, which is a bit faster than its pace since 2004.’

Wealthy Nations Daily Update - Non-Farm Payrolls

The employment data remains one of the strongest data points on the US economy and today’s non-farm payroll data was no exception showing 242,000 jobs added in February which exceeded expectations of 195,000 jobs added.  The prior figure was revised up from 151,000 jobs to 172,000 jobs.  The unemployment rate was unchanged at 4.9 percent and the labour force participation rate increased to 62.9 percent from 62.7 percent in January.  On a weaker note, average hourly earnings came in below expectations at 2.2 percent yoy which was down from the prior month’s reading of 2.5 percent yoy and average hours worked edged back to 34.4 from 34.6 in January.

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