American Job Creation Beats Expectations

Retail sales in the Euro economic bloc recorded moderate improvement over the month of December according to the report from the European Statistics Office, logging gains of 0.30%, outpacing November’s -0.30% contraction by a wide margin. This figure marked the first increase in 4-months after food products alongside drinks and tobacco experienced an uptick of 0.60% whereas non-food products rose by 0.20%. Energy remained a drag with fuel sales for automobiles declining by -0.10%. Annualized retail sales rose by 1.40% in December, pulling back slightly from 1.60% in November. According to Euro Stat, seasonal factors such as the holidays helped grow consumption while the bigger picture gains reflect the gradual improvement in the labor market. The total average of retail sales for the year of 2015 reported a growth of 2.40%. The Euro gained further ground versus the US dollar, extending the recent rally briefly back above 1.1100 before pulling back slightly.

Job growth remains resilient in the United States despite a vicious month to start off the year after above average financial market volatility and enduring turbulence in the global economy. The nonfarm employment release distributed by Automatic Data Processing (ADP) reported 205,000 workers hired during the month of January. While marking a notable retreat from December’s higher revised result of 267,000, it still managed to beat expectations of 195,000 jobs created. Service providers hired the most in January, accounting for 192,000 positions of the total gained, with gains in the business sector at 44,000 and construction adding 21,000. The upbeat assessment for the labor economy reflects optimism in the outlook, a pick-up in demand as well as wage gains. Despite the positivity, the US dollar continued to show weakness, dropping back below 118.00 versus the Yen and erasing all the pair’s gains following the Bank of Japan’s negative rate decision.