US: Weak NFP report relative to market expectations – Danske Bank

Danske Bank analysts point out that the main event on Friday was the US labour market report for December where the non-farm payrolls came out at 145,000 persons compared to the 166,000 consensus estimate.

Key Quotes

“The November figure was revised lower by 10,000 to 256,000 persons. Overall a weak report relative to market expectations. However, job growth remains above labour supply growth. Hence, it was still strong enough for the labour market to continue to tighten.”

“The unemployment rate was unchanged at 3.5% but noteworthy 'underemployment' fell from 6.9% to 6.7%. We see this measure as a better slack gauge than the actual unemployment rate. Finally, wage growth came in weaker in December at 0.1% m/m and the annual growth rate eased from 3.1% to 2.9%. It seems that wage growth has peaked.”