Lots of other people gave offered up their opinions and analysis on this morning’s job’s report so I’ll just provide a summary perspective:
- The December reported job gains of 74K was well below expectations of 200K.
- November was revised up substantially from 203K to 241K.
- Private payrolls came in at 87K vs expectations of 189K.
- Average hourly earnings were lower than expected at 0.1%.
- The unemployment rate came in at 6.7%, which is fairly misleading considering the changes in the participation rate.
- Weather is being cited as a major contributing factor to the negative report.
Major conclusions:
- There is still no sign of wage inflation in this data therefore we should not be worried about inflation in the near-term.
- The economy remains weaker than many expect. Muddle through is still very much on the table in my opinion and the consensus could be overly optimistic about the macro picture heading into 2014.
- The Fed is unlikely to aggressively taper this year. Easy money is here to stay.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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