Home » [Hua Chuang Macro Zhang Yu Team]Why did the non-agricultural income in January exceed expectations? ——Comments on non-agricultural data in January | Investing.com

[Hua Chuang Macro Zhang Yu Team]Why did the non-agricultural income in January exceed expectations? ——Comments on non-agricultural data in January | Investing.com

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[Hua Chuang Macro Zhang Yu Team]Why did the non-agricultural income in January exceed expectations?  ——Comments on non-agricultural data in January | Investing.com

matter

The number of new non-agricultural jobs in the United States in January was 517,000, which was better than Bloomberg’s forecast of 188,000, and the December data was revised up to 260,000; the unemployment rate in January was 3.4%, Bloomberg’s forecast was 3.6%, and the previous value was 3.5%; January Labor The participation rate increased to 62.4%, better than Bloomberg’s expected 62.3% and the previous value of 62.3%; January non-agricultural hourly wages were +4.4% year-on-year, expected +4.3%, and the previous value was revised to +4.8%; month-on-month +0.3%, expected +0.3%, the previous value was revised up to +0.4%.

The main points

1. New non-agricultural colleges exceeded expectations, and hourly salary growth continued to decline

The number of new non-farm payrolls in January exceeded expectations by a large margin. The United States added 517,000 non-farm payrolls in January, better than Bloomberg’s forecast of 188,000, and the December figure was revised up to 260,000. In terms of industry structure, the main source of new employment in January is still the high-touch service industry. In January, 333,000 new jobs were created in the high-touch service industry, an increase of 138,000 from December. Specifically, the main sources of new employment are still the leisure and hotel industry, professional and business services, education and health care services. The private sector added 61% of total non-farm employment.

The unemployment rate continued to fall more than expected, and the labor participation rate rose more than expected. The labor participation rate rose to 62.4% in January, which was better than Bloomberg’s forecast of 62.3% and the previous value of 62.3%. Among them, “golden age” (25-54 years old) workers The participation rate continued to rise, recording 82.7% in January, +0.3 percentage points from December.

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Nonfarm payroll growth continued to decline in January. In terms of industries, the year-on-year growth rate of hourly wages in professional and business services, education, and health care services declined significantly compared with the previous month. The hourly wages increased by 4.5% and 4.5% year-on-year, compared with the previous values ​​of 5.0% and 5.0%.

However, the current non-agricultural job vacancy rate is still high, and the prospect of hourly wages is still uncertain. In December, the non-agricultural job vacancy rate was 7%, which was higher than the previous value of 6.7%. In terms of industries, the job vacancy rate of the leisure and accommodation industry has risen sharply again compared with the Q3 average, recording 10.8%, which is close to the highest level in history; while the job vacancy rate of professional and business services, medical care and other service industries has not seen a clear decline trend.

2. Why did the non-farm payrolls in January exceed expectations?

One of the reasons for the unexpected employment data is the adjustment of the data caliber. In terms of Household Survey data, in 2023 the U.S. Department of Labor adjusted the sample of Household Survey data, which affected the comparability of January data with December data. According to the data from the Ministry of Labor, if statistical factors are excluded, the number of new jobs in January was only 84,000, and the labor force participation rate was 62.3%, which was the same as in December. In terms of establishment survey data (Establishment Survey), the 2023 industry classification method has been revised, from the 2017 NAICS classification standard to the 2022 NAICS standard. According to the estimates of the Ministry of Labor, the revision of the classification standard has a significant impact on retail trade, manufacturing, and financial activities. The new employment data of other industries have caused interference. Second, government departments added 74,000 new jobs in January, concentrated in the field of local government education (an increase of 35,000 people), mainly due to the return of labor strikes in universities in the early days.

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Three, the employment data itself is a lagging indicator of the economy. Only when enterprises know that downstream demand has fallen and orders have fallen will they choose to significantly reduce the number of employees. However, the current demand is still resilient, especially the demand for the service industry is strong, and the labor market is tight. , Recruitment is difficult and costly, service industry companies have a high probability of choosing not to lay off employees temporarily, and recruit as many low-cost employees as possible. Therefore, it can be seen that more than 60% of the new non-agricultural employment in January was concentrated in the service industry, and the growth rate of hourly wages in the service industry in January was also relatively low.

The stronger-than-expected non-agricultural data in January has brought about a sharp rise in market expectations for Fed tightening. After the release of the non-agricultural data, the Fed’s interest rate hike is expected to increase from the final rate hike of 25bp to 5% in March to the terminal rate of 25bp to 5.25% in March and May respectively. The increase in interest rate hike expectations has also brought about a significant cooling of asset prices’ previous expectations for policy shifts. The S&P 500 closed down 1.04%, the 10Y U.S. bond yield rose 13bp to 3.53%, and the U.S. dollar index rose 1.23% to 102.99. In “U.S. stocks “preemptively” turn, be wary of the risk of follow-up supplementary losses – comments on the FOMC meeting in February” we reminded that since the beginning of the year, US dollar assets, especially US stocks, have “preempted” the Fed’s pivot (Pivot) transactions. Therefore, We need to be vigilant against the risk of U.S. stocks compensating for losses brought about by the ebb of Pivot transactions under the background that the current job market is still resilient.

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