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US Non-Farm Payroll Results Miss Expectations

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US non-farm payroll data in December

December non-farm payroll data indicated a slowdown in the US labor market (SPY) (VFINX) after a strong rise in November 2017. Non-farm payrolls stood at 148,000 in December, compared with 252,000 in November 2017. However, this figure didn’t meet the market expectation of 190,000.

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December highlights of the jobs report

  • the healthcare (XLV) sector added 31,000 jobs
  • the food service and drinking place sector added 25,000 jobs
  • the professional and business service sector added 19,000 jobs
  • the manufacturing sector added 25,000 jobs

A slow labor market is a concern for equity markets. In the past few months, the US labor market has improved. The stronger labor market, along with the inflationary situation, is helping the Fed continue its gradual rate hike process.

In the past few months, the S&P 500 (SPX-INDEX) (SPY) has risen due to the expectation of economic reform. The tax reform bill passed by Congress in December 2017 has encouraged the market rally. Improvements in fundamental factors are key in supporting this market movement. In the next part of this series, we’ll analyze the ADP National Employment Report in December 2017.

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