According to the recently released data, job growth in the United States of America lost pace in December at a greater rate than expected. Despite the blow to the manufacturing sector that stemmed from the ongoing U.S – China trade war, the rate of hiring, as per the experts, still remains stable enough to support the economic expansion in the U.S that has been branded historically the longest.
Average Hourly Earnings Recorded Less Than Expected Increase In December
The Labor Department announced its monthly unemployment report on Friday. As per the economic data, December’s unemployment rate of 3.5% marks the lowest in the past fifty years. The gain in hourly wages, however, remained shy of the analysts’ estimate. According to the experts, while Friday’s data gives mixed signals, it is insufficient to change the U.S Fed’s stance that highlighted the U.S economy and the monetary policy to be right where it is needed.
The official data on Friday also revealed that nonfarm payrolls in the U.S saw a gain of 145,000 positions in December. The manufacturing sector, however, remained in the red territory after recording a significant gain in November that was attributed to 46,000 General Motors workers returning to work after a multiday strike. The increment in nonfarm payrolls, however, was reported as the tiniest in the past 8 months.
Notable Figures In Friday’s Economic Data
In a previous estimate, analysts had expected a 0.3% increase in average hourly earnings in December. The data on Friday, however, showed the gain in average hourly earnings to have remained capped at a much lower 0.1%. The Bureau of Labor Statistics had announced the average hourly earnings to have gained by 0.3% in the U.S in November. In terms of nonfarm employment change, analysts had forecast 162,000 positions to be added in December. The economic data, however, showed a much lower increment of 145,000 jobs last month instead. In November, the Bureau of Statistics had revealed 256,000 added positions.
Friday’s economic data weighed significantly on the U.S dollar index that dropped from a daily high of 97.28 to 97.09 following the data. Consequently, volatility stirred in the forex market and one of the most widely traded currency pairs, EUR/USD, caught steam from a daily low of 1.1085 and was last seen trading as high as 1.1120. As per the analysts, the U.S dollar index is likely to remain volatile around 97.50 level. Breaking above the crucial resistance is needed for the greenback to post a strong buy signal.