Tracking the strong ADP release on Wednesday, the January non-farm payrolls report also comfortably beat expectations. Weather has helped a bit last couple of months, with seasonal disruptions lower than normal, but that doesn’t detract from the underlying strength of the labour market.
Slight undershoot in the December payrolls report, but the 145k jobs created is only modestly below the 164k market guess and while the revisions from November were slightly downward that was a strong report in itself. Over 12-months revisions are very mildly negative but not showing any real deterioration in trend since the summer.
A positive surprise, particularly after the weak ADP number on Wednesday, with non-farm payrolls +224k in June, although there were mild downward revisions for the previous two months (-11k).
Mirroring the weak ADP figure the May payrolls numbers also surprised on the downside. Revisions also downward, which also showed up in ADP’s release. The participation rate was stable, as was the unemployment rate. Hourly earnings were a little softer than expected and hours worked were flat at 34.4, which is down versus a year ago, dampening gains in weekly wage growth.
A stronger payrolls number, but after the disruptions of last month (weather knocking around 80k off the headline figure) the bounce could still have been a stronger. But enough to maintain sold employment growth, which continues to defy estimates that the labour market is tight...