US Jobs Growth Disappoints Estimates

The final nonfarm payroll job creation figures for 2016 came in below Wall Street estimates, printing at 156,000 new positions added versus expectations of 178,000.  Despite the revision higher of the November figure to 204,000 from the 178,000 initially reported, it was still not enough to prevent the unemployment rate from ticking slightly higher to 4.70% from 4.60%.  The one positive development was the 0.40% jump in hourly earnings during the month, displaying the fastest pace of growth since the last financial crisis.

Aside from US labor fundamentals, manufacturing data from across the globe showed positive momentum, with US, German, Italian, Spanish, UK, and Chinese purchasing managers’ indices all climbing.  In another sign that the aggressive easing actions of the European Central Bank is delivering results, the preliminary headline inflation figures for December showed growth of 1.10% during the period.

This marked the highest rate of inflation since September of 2013 and shows that the German inflation figures were not just a one-off event.  Finally, the Federal Reserve continued expressing its hawkishness, with the latest FOMC Meeting Minutes stressing the case for three rate hikes during 2017.