Higher Employment, Weaker Wages

Posted by: : Paul EbelingPosted on: March 6, 2015 Higher Employment, Weaker Wages
 

Higher Employment, Weaker Wages

The ‘Headline Beat’ in the February employment report took a back seat to weaker wage growth.

NFPs added 295,000 jobs in February after adding a revised 239,000, from 257,000 in January. The consensus expected NFPs to increase by 240,000 new jobs. This report is not good.

Headline payrolls topped expectation, but average hourly earnings increased just 0.1% after growing by 0.5% in January.

Weak wage growth combined with the improvement in payrolls led to a 0.4% increase in aggregate wages. Put in perspective, even after the downward revision to the January payroll numbers, aggregate income increased 0.7% last month.

Since consumption growth, and economic growth in general, follow the trend in income, the February employment results were much worse than January even though this month’s headline payroll number exceeded expectations and the prior mark.

US employment is not as strong as the headline suggests.

Have a terrific weekend.

Paul Ebeling

HeffX-LTN

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

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