The state of employment in the United States is shocking the nation. The entire country — and world for that matter — is anxiously awaiting December’s Nonfarm Payrolls (NFP) report. Look for this new report to be released in the coming days. Specifically, it holds out the hope of showing us what’s really going on with job creation across the country. Economists are forecasting as many as 60,000 new jobs to have been created in December, which would signal a continuing strong economic picture. At the same time, the unemployment rate is projected to stay at 4.5%, a testament to the continued strength of the labor market.
Beyond the NFP report, an interesting juxtaposition has taken place that has helped set the stage for market-watchers. The preliminary estimate of the January Michigan Consumer Sentiment Index, which includes inflation expectations, was released earlier this week. This index is one of the most important barometers of consumer confidence. Equally important, it measures innovative spending behavior—spending innovation—that’s fundamental to fueling long-term economic growth.
In addition, the December Challenger Job Cuts report showed that US-based employers announced 35,553 planned job cuts last month. This represents a notable 168% decline from November’s dire count of 71,321 job cuts. That dip in layoffs is an encouraging indicator of hiring practices beginning to stabilize across many sectors. Overall, this trend undergirds a justly cautious and a justly optimistic outlook for the US economy.
As far as jobless claims go, new numbers for the week ending January 3 were up slightly to 208,000. That’s well above the 210,000 claims we were imagining. It does represent a rise from the 200,000 total recorded last week. Continue reading The 4-week moving average of initial jobless claims fell by 7,250. It’s now 211,750, down from the previous week’s revised average. This reduction may reflect less variation in employment count ups and downs, so no worries for the employment story’s overall sunny employment guide.
The unexpected strengthening in positive employment data has supported the value of the US Dollar. The Greenback saw a little bit of short-term safe haven demand versus all major counterparts as traders processed the positive labor market data. These advances are likely to add to the confidence in this dollar, as markets are looking for clearer guidance from the next NFP report.
This potent mix of good employment news and strong expectations about future job growth is poised to shape market dynamics in deeply positive ways. Investors are still laser-focused on how these reports will impact economic projections and determine what Federal Reserve policymakers do, or don’t do, next.