After a slew of employment data, fears of a slowing in the effectiveness of the FED’s fiscal policy are waning.
The employment situation for December 2014 as reported on Thursday saw total nonfarm payroll employment up by 252,000 in December, and the unemployment rate decline to 5.6%, as reported by the U.S. Bureau of Labor Statistics. Job gains occurred in professional and business services, construction, food services and drinking places, health care, and manufacturing, in that order.
Though continuing jobless claims were slightly above expectations at 2,400K versus 2,395K and previous of 2,394K, these only accounted for 31.9% of the unemployed. Hence analysts will focus more on the initial jobless claims, which fell below expectations at 278K versus 290K, though this figure is still rising from November’s figure of 267K. Over the year, the unemployment rate and the number of unemployed persons were down by 1.1% and 1.7 million, respectively.
In December, average hourly earnings for all employees on private nonfarm payrolls decreased by 5 cents to $24.57, following an increase of 6 cents in November. Over the year, average hourly earnings have risen by 1.7%. This yearly figure is positive for the FED’s fiscal approach to recovery, bringing consumer earning up to support the economy. This is an aspect of the U.S economy that needs attention as this week’s figure for U.S. personal spending was disappointing for December at -0.3% versus expectations of -0.2% and previous 0.5% - the lowest level seen since May 2013.
An encouraging aspect to the data is the 4-week average of jobless claims which fell from 299.25K to 292.75K, and the fact that in 2014, job growth averaged 246,000 per month, compared with an average monthly gain of 194,000 in 2013.
Also reported was the overall trade balance that measures the difference in value between imported and exported goods and services over the reported period, which was worse than expected at -46.56B versus predictions of -38.00B and a previous figure of -39.75B.
On the back of mixed but mostly positive news from the U.S. data, and on news from Europe that the ECB rejected Greece’s claim to use government bonds as the solution to the bailout problems, stocks found ground for intraday traders alongside EURUSD volatility:
USTECH100 [Nasdaq] up from 4185 open
USA500 [S&P] up from 2021 open
USA30 [Dow] up from 17503
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