Summary:

• US NFP for November 228k vs 198k exp and 244k prior 
• Average earnings m/m rise by 0.2% vs 0.3% exp 
• Mixed reaction in USD and Gold. US500 hits daily highs

The final US jobs report of the year has shown a bigger rise than expected, but a miss in wage growth has taken the shine off the release. The headline print of 228k was above the 198k consensus forecast but below the prior reading of 244k which itself was revised lower from 261k.

 The run of strong NFP releases has continued and unemployment remains near its lowest level in 17 years. Source: XTB Macrobond

The gains in jobs are pretty strong but with the average earnings m/m only rising by 0.2% compared to estimates of a 0.3% increase the initial reaction in the US dollar has been mixed. Given that the unemployment rate remained at a 17-year low of 4.1% many analysts look more closely at the wage data rather than the number of jobs added as they believe this is more indicative of underlying inflation. In year-on-year terms the average hourly wages came in at 2.5%, which whilst improving on the prior reading missed the forecast for a 2.7% increase. 

 The rise in average hourly wages could be seen to be supportive of higher inflation going forward. Source: XTB Macrobond

In terms of market reaction the US dollar has slipped a little since the release with the below forecast wage data seemingly offsetting the beat in the headline print. Gold has been pretty volatile as is often the case with the precious metal and whilst it has popped higher in recent minutes it remains not far form its daily lows which were in fact the lowest since August. 

 The initial reaction has seen a little USD weakness as the miss in wage growth seems to have outweighed the beat in the headline. Source: xStation

The stock futures have had a positive reaction to the report with the US500 moving to its highest level of the day and now trading not far from flat on the week. After the initial gap higher on Sunday’s open was filled the US500 had a look at turning lower but held support around 2621 and is now attempting to post a weekly gain. 

 The US500 has gained today and is looking to end the week on the front foot. Source: xStation