U.S. stock indexes opened flat on Monday, following a disappointing jobs report (non-farm) on Friday from the U.S. Labor Department which showed the U.S. economy added just 148,000 non-farm payroll jobs in December, lower than the consensus estimate, while the unemployment level matched a 17 yr. low at 4.1 percent for the 3rd consecutive month.
Employment in retail declined -20,000 in December during a traditionally strong retail month due to holiday spending.
Increased online shopping during the holiday has an impact on hiring levels at major U.S. retailers, especially big box retailers.
Jobs gains in December were highest in health care (+ 31,000) followed by construction ( + 30,000).
In 2017, payroll employment growth totaled 2.1 million under the Trump administration, lower than 2.2 million in 2016.
Job revisions for November and October were 9,000 less than first reported.
October job gains dropped from 244,000 to 211,000 while November was revised up from 228,000 to 252,000.
The December jobs report showed that average hourly earnings rose by 9 cents to $26.63.
Over the year, average hourly earnings increased modestly by just 65 cents, or 2.5 percent.
December Fed Minutes
Last week, the Fed released the minutes from their December 12-13th monetary policy meeting that showed committee members projecting mostly sluggish inflation increases in 2018.
“Total PCE price inflation in 2018 was projected to be about the same as in 2017, despite projected declines in consumer energy prices; core PCE prices were forecast to rise faster in 2018, reflecting the expected waning of transitory factors that held down those prices in 2017” according to December Fed minutes.
PCE price inflation over the past year ending in October was at 1.6 percent and remains below the Committee’s longer-run 2 percent objective.
Core PCE price inflation, minus food and energy prices, was only 1.4 percent during the same period.
The Week Ahead
Earnings season gets underway this week with corporate earnings due from several large U.S. banks, including J.P. Morgan Chase on January 12th.
Two inflation reports are due this week with December PPI due on Thursday and Consumer Price Index (CPI) for December due on Friday alongside the retail sales report for the same month.
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