US: Wage and employment growth exceed expectations – Nomura

Analysts at Nomura explain that January’s employment report of US shows that 2017’s economic momentum carried into 2018 as nonfarm payrolls grew 200k, in line with Nomura’s expectations.

Key Quotes

“However, wage growth was a more important development. Average hourly earnings increased 0.3% m-o-m, coupled with positive revisions to past months that contributed to an acceleration of the 12-month change rate to 2.9% in January, the fastest pace during the recovery. Part of the wage acceleration was likely due to idiosyncratic factors, but wage growth appears to show signs of picking up after a lackluster 2017. The unemployment rate remained unchanged at 4.1%, above our forecast, but the strong job market will likely continue to put downward pressure on the unemployment rate in the months ahead.”