Job creation in the US slowed its pace in 2019 – UOB

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Alvin Liew from Global Economics & Markets Research at UOB Group assessed the latest Payrolls figures.

Key Quotes

“December’s employment creation came in below expectations, as the US economy added 145,000 jobs in the last month of 2019 (Bloomberg median forecast: 160,000). Adding to the disappointment was the small 14,000 downward revisions to the November (256 from 266 previously) and October (152,000 from 156,000) job prints. The private sector was responsible for most of the US jobs creation with 139,000 (markedly lower from the 243,000 in November) while the government added 6,000 jobs.”

“US unemployment rate stayed near the 50-year lows at 3.5% in December (unchanged from November) while labor participation rate was also steady at 63.3%. US wage growth came in below market expectations, rising by 0.1% m/m, 2.9% y/y from 0.3% m/m, 3.1% y/y in November (and a miss from Bloomberg median estimate of 0.3% m/m, 3.1% y/y), marking the first time that wage gains were below 3% on a y/y basis since July 2018. That said, it should be noted October’s wage growth was first reported at 2.9% y/y and subsequently revised higher back to the 3.0% y/y rate.”

For the full year, job creation averaged at 176,000 monthly in 2019, below the 223,000 monthly average recorded for 2018. The variance between the best month and the worst month for job creation also widened in 2019 (from 2018) but there was still positive overall employment increase every month (i.e. no job losses in any month for 2019). Wage growth average also edged higher to 3.2% in 2019 (from 3.0% in 2018) and unemployment rate is as good as it gets, at 3.5% (easing 0.4ppt for the year 2019).”

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