US employment growth disappoints
US employment growth disappoints
The benchmark 10-year U.S. Treasury note rose,pushing its yield down to 2.6820 percent
....................................................................
The US economy added just 113,000 jobs in January, as the unemployment rate edged down to 6.6 per cent - dashing hopes of a steady acceleration in the recovery and posing a challenge to Janet Yellen in her first weeks as Federal Reserve chair.
After job creation slumped in December, economists were very keen to assess whether that dip was an anomaly or a reflection of a deeper slowdown in the strength of the US economy.
With payroll formation in January rebounding only slightly, and well below economists' expectations of 180,000 new positions, fresh concerns are likely to mount about the US economy entering a new rough patch. But last month's figures may also be a poor guide, in that bad weather across big portions of the country could have distorted the data.
US equity futures were firmer, the dollar weakened and Treasury bond prices rose after the report was released.
"A very mixed and confusing employment report," said Alan Ruskin, strategist at Deutsche Bank. "There are a plethora of valid excuses for confusing data including snow, drought, annual revisions and benefit changes. Against this backdrop, this data will not change the Fed's well-defined $10bn per meeting tapering path."
The payrolls data are often the most closely watched part of the jobs report, and over the past few years they have been remarkably steady in showing that employers are creating new positions at a monthly rate of between 150,000 and 200,000.
Revisions to payroll numbers for the past two months were somewhat encouraging, adding 34,000 new jobs. But virtually all the improvement was concentrated in the month of November, with the weak December reading bolstered by just 1,000 new jobs.
Among the weakest areas in the labour market in January were government, which lost 29,000 positions, and retail, which shed 13,000 positions. Manufacturing and construction were fairly strong, adding 21,000 and 48,000 jobs respectively. The average work week held steady at 34.4 hours, while average hourly earnings edged up to $24.21.
The separate and more volatile survey of households was more encouraging, however, showing a decline in the unemployment rate to 6.6 per cent that was driven more by people finding employment than dropping out of the work force.
The labour force participation rate, which had been falling more than many economists had forecast in recent years, edged up to 63 per cent.
Concerns about the decline in labour force participation in the world's largest economy were exacerbated this week when a report by the Congressional Budget Office found that President Barack Obama's 2010 health law would further dent the US workforce by reducing the incentive to work longer hours, leading to the loss of the equivalent of 2.5m full-time positions by 2024.
The January jobs figures come on the heels of a strong report on US gross domestic product for the fourth quarter, showing output growth of 3.2 per cent.
The strong growth numbers were widely seen as validating the Fed's decision to begin cutting back the pace of its asset purchases in December.
The Fed continued its tapering policy last month, the final one with Ben Bernanke at the helm of the US central bank. Ms Yellen was sworn into the job this week, and will face her first big public test when she testifies before Congress next week.
Financial Times
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
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The benchmark 10-year U.S. Treasury note rose,pushing its yield down to 2.6820 percent
....................................................................
The US economy added just 113,000 jobs in January, as the unemployment rate edged down to 6.6 per cent - dashing hopes of a steady acceleration in the recovery and posing a challenge to Janet Yellen in her first weeks as Federal Reserve chair.
After job creation slumped in December, economists were very keen to assess whether that dip was an anomaly or a reflection of a deeper slowdown in the strength of the US economy.
With payroll formation in January rebounding only slightly, and well below economists' expectations of 180,000 new positions, fresh concerns are likely to mount about the US economy entering a new rough patch. But last month's figures may also be a poor guide, in that bad weather across big portions of the country could have distorted the data.
US equity futures were firmer, the dollar weakened and Treasury bond prices rose after the report was released.
"A very mixed and confusing employment report," said Alan Ruskin, strategist at Deutsche Bank. "There are a plethora of valid excuses for confusing data including snow, drought, annual revisions and benefit changes. Against this backdrop, this data will not change the Fed's well-defined $10bn per meeting tapering path."
The payrolls data are often the most closely watched part of the jobs report, and over the past few years they have been remarkably steady in showing that employers are creating new positions at a monthly rate of between 150,000 and 200,000.
Revisions to payroll numbers for the past two months were somewhat encouraging, adding 34,000 new jobs. But virtually all the improvement was concentrated in the month of November, with the weak December reading bolstered by just 1,000 new jobs.
Among the weakest areas in the labour market in January were government, which lost 29,000 positions, and retail, which shed 13,000 positions. Manufacturing and construction were fairly strong, adding 21,000 and 48,000 jobs respectively. The average work week held steady at 34.4 hours, while average hourly earnings edged up to $24.21.
The separate and more volatile survey of households was more encouraging, however, showing a decline in the unemployment rate to 6.6 per cent that was driven more by people finding employment than dropping out of the work force.
The labour force participation rate, which had been falling more than many economists had forecast in recent years, edged up to 63 per cent.
Concerns about the decline in labour force participation in the world's largest economy were exacerbated this week when a report by the Congressional Budget Office found that President Barack Obama's 2010 health law would further dent the US workforce by reducing the incentive to work longer hours, leading to the loss of the equivalent of 2.5m full-time positions by 2024.
The January jobs figures come on the heels of a strong report on US gross domestic product for the fourth quarter, showing output growth of 3.2 per cent.
The strong growth numbers were widely seen as validating the Fed's decision to begin cutting back the pace of its asset purchases in December.
The Fed continued its tapering policy last month, the final one with Ben Bernanke at the helm of the US central bank. Ms Yellen was sworn into the job this week, and will face her first big public test when she testifies before Congress next week.
Financial Times
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
--
You received this message because you are subscribed to the Google Groups "Product Updates for AMC" group.
To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups.com.
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