IRVINE, Calif.–The December jobs report released last week by the Bureau of Labor Statistics was “emblematic of U.S. economic situation in 2016,” according to analysis by HomeUnion.
“Employers added 156,000 jobs last month, below expectations but good enough to keep the economy moving forward,” noted HomeUnion Director of Research Steve Hovland. “The breakout year for the current economic cycle has remained elusive, and may fail to arrive before the next recession. Nonetheless, the economy has added jobs for 75 consecutive months, the longest stretch in the post-war era. Unemployment remained below the full-employment threshold of 5%, ticking up 10 basis points to 4.7%.”
Hovland said the “long elusive” wage growth component of the establishment survey finally arrived in December. The data show workers received a 2.9% raise compared to the same month last year, the quickest pace since 2009.
Hovland added that one “wildcard in wage growth” in December was a court ruling against the Labor Department’s plan to life the exemption on employees eligible for overtime.
“Another month of solid wage gains will paint a clearer picture of whether or not the tight job market is finally supporting competition among employers,” said Hovland. “Overall, banks appear to have priced in a portion of the next hike, and will move ahead of the Fed as long as the economy remains on the current trajectory. As a result, investors that act before the spring buying season will be rewarded with lower capital costs and lower median home prices.”