Daily Commentary BY THE CURVE TEAM –

US Data Hit and Miss

11th of December, 2017

There was increased interest in the data Friday night ahead of this weeks FOMC meeting with the non-farm payrolls report providing plenty of talking points. While the employment report and the disappointing consumer confidence report will have plenty of chins wagging ahead of Thursday’s decision, it shouldn’t impact the end result too much.

The US non-farm payrolls report was mostly positive when it was released on Friday night. The headline number came in higher than expected with 228,000 jobs added in November against expectations of a rise of 195,000. The increase in wages was a little disappointing, missing expectations as wage growth throughout the economy remains patchy. The fact that it is rising briskly in some sectors will be something that the FOMC will be wary about.

The steady lift in aggregate wage growth hasn’t been enough to provide a sustainable boost in consumer confidence. Over the course of 2017, consumer sentiment has failed to rise substantially. From the preliminary on Friday night, the fall points to confidence finishing the year largely where it started.

The net result of the data is unlikely to deter the FOMC when they meet later this week. While we still have Producer Price and Consumer Price data to be released before the FOMC announces their decision, only a unexpectedly low number would have any chance of stalling the next expected rate hike to the Fed Funds rate.

David Flanagan

Director - Interest Rate Markets