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US Non Farms Post Significant Improvement

James Boston
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US Non Farms Post Significant Improvement

The US labour market is showing some very strong signs of improvement according to the latest data just published by the Department of Labor. The headline Non Farm Payroll numbers easily outperformed market expectations with the latest reading of 321k, this compares to a revised October number of 243k and an anticipated showing of just 232k today. The Private Non Farm Payrolls were the main contributing factor to today’s significant rise, broken out this figure has been announced as 314k in comparison to 236k in October, the expectation was for a number of just 220k. The change in Government Payrolls has once again come in at 7k while the Manufacturing Payrolls number has risen to 28k from 20k in October.

The official Unemployment Rate has been confirmed as having remained at 5.8% for a second month running, there was no expectation of any material change in this number today. The real positive surprise in the employment data today is coming in the form of strong signs of a reduction in slack within the labor markets which is clearly evidenced by the strong rise in employee earnings. The Average Hourly Earnings figure has posted a rise of 0.4% in November when measured month on month, this compares to the October figure of 0.1% and easily came in better than the anticipated 0.2% rise. The year on year version of this figure has now picked up to read at 2.1% in comparison to just 2.0% in October. Reinforcing this tightening in the demand in the labor market is the moderate rise in the Average Hours Worked statistic, this is now reading at 34.6, up one point on the revised October showing of 34.5. Today’s data will be of particular interest to the Federal Open Markets Committee which has until now discounted the fall in unemployment due to the slackness in the market, we now have clear evidence that this slackness is dissipating.

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