US: Weak labour market data – Nordea Markets

Anders Svendsen, research analyst at Nordea Markets, points out that the US labour market showed weakness for the month of November as the nonfarm payrolls and wage growth were weaker than expected, while the broad unemployment was higher than expected.

Key Quotes

Job gains: Weaker than expected and mild negative revisions from the recent two months. The 12-month trend remains around 200k, but employment growth will most likely lose pace in 2019. We expect a trend around 175k in the first half, falling to around 125k in the second half of the year.”

Wage growth: Average hourly earnings were a bit slower than expected but is running above 3% y/y for the second consecutive month. Wage growth is likely to pick up further going forward with the unemployment rate at these low levels.”

Unemployment: Unchanged at very low levels, but with broad unemployment (U6) up – temporarily – 0.2% points in November.”

Looking ahead: The labour market remains tight and will only become tighter until the next downturn. However, the employment trend will weaken in 2019 and it is difficult to see the unemployment rate much lower from current levels.”

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