December Payrolls Stronger Than Expected, November Revised Higher

Total nonfarm payroll employment rose to 252,000 in December (against the 240,000 consensus estimate), and the unemployment rate declined to 5.6 percent, as reported by the U.S. Bureau of Labor Statistics.

Job gains occurred in professional and business services, construction, food services and drinking places, healthcare, and manufacturing.

According to Bloomberg, its “survey of economists called for a 240,000 advance in payrolls. Estimates of 99 economists ranged from gains of 160,000 to 305,000 after a previously reported 321,000 November increase.”

The unemployment rate declined by a 0.2 percentage point to 5.6 percent in December, and the number of unemployed persons declined by 383,000 to 8.7 million.

Wages fell $0.05 to $24.57 for the average hourly earnings for all employees in December.

"Say what you want about the Fed hiking rates later this year, but with the lowest unemployment rate in 7 years, lowest oil in 5 years, low inflation, and a growing economy, you have the perfect environment for risk-on investors," Dr. Thomas Carr, founder and CEO of DrStoxx.com, told Benzinga.

The change in total nonfarm payroll employment for October was revised from +243,000 to +261,000, and the change for November was revised from +321,000 to +353,000. With these revisions, employment gains in October and November were 50,000 higher than previously reported.

Regarding the decrease in wages, Chief Strategist at TD Ameritrade JJ Kinahan told Benzinga, "Should we be concerned that wage growth has gone negative? Of course. But it's a one month number."

Kinahan continued that the longer-term trend is positive and that investors should also consider the possibility of a revision in the upcoming report.