US jobs resilient despite global headwinds. Wage growth emerges even as their labour market adds fewer jobs in January

The number of new jobs in the US economy in January came in way below forecast, but markets focused on wage growth rather than that.

151,000 extra jobs were reported the the Non-farm payrolls report, well under the 191,000 expected and the 262,000 gained in December.

But their unemployment rate fell to 4.9%. That is an eight year low.

Their participation rate was unchanged at 62.7%.

And American wage growth rose +2.5% over the year to January and far above their headline inflation rate.

Markets have taken this data to indicate the US labour market recovery remains firm.

And that implies the Fed will feel it can maintain its rate hike plans, especially after the emergence of the long-awaited rise in wages.

Equities fell on Wall Street, and are down -2% on the S&P500 and more than -3% on the NASDAQ.

Of more importance for New Zealand, the US dollar rose as sharply as stocks have fallen, although to be fair, fx markets anticipated the data release and started falling late yesterday.

One under-reported feature of today’s data are the prior-period revisions. Although it turns out the strong +292,000 new jobs in December was revised down to +262,000, over the whole year these revisions were higher than initial reports, adding +100,000 more jobs created than initially reported.

In other data released today in the US, consumer credit jumped at an annual rate of 7.2% in December.