Jobs Report Misses Estimates, But May Set Up A Brighter Big Picture

Non-farm payrolls grew by 156,000 jobs in December, a number that missed expectations but was counterbalanced by the highest gain in average hourly earnings since 2009.

Headline unemployment edged higher to 4.7 percent, according to a report Friday from the Bureau of Labor Statistics, in-line with economists' expectations.

Fed Likely To Stand Pat For Now

JJ Kinahan, TD Ameritrade's chief market strategist, told Benzinga this job report didn't carry too much weight, in and of itself, in terms of fiscal policy.

"Jobs is always the most important number of the month, but because we're under a presidential transition, Fed funds are telling us that there's really going to be no action until May in terms of the Fed."

Kinahan refers to the Fed fund futures, the contracts investors use to bet on the likelihood of interest rate movements. Without an imminent decision likely, today's job report isn't likely to influence Fed decisions in the near term.

Stats That Stand Out

"The yearly summary, I think that becomes important," Kinahan continued, "Overall I think what it shows is jobs have been very consistent over 2015 and 2016. And wage growth, which was a bit higher on today's [Friday's] report overall, which is great, has not been at the level we want to see but has been very consistent over the last two years."

Average hourly earnings hit a $26 benchmark, which was $0.10 higher than the November average and 2.9 percent up from the start of the year. Workers logged an average of 34.3 weekly hours.

Trade Deficit Expands

The Commerce Department said the U.S. trade deficit in November rose to the highest level in nine months. Imports of oil and other foreign goods increased, while American exports fell for a second month. The trade deficit jumped 6.8 percent to $45.2 billion, the largest imbalance since February.

"I think that we'll see if it's more holiday related," Kinahan commented. "I'm not completely surprised seeing that because we import so many holiday goods like toys and clothing. I think that's something we have to take a couple-of-quarter view on rather than a month-to-month."

Things To Watch For

Despite steady wage growth and job creation under President Barack Obama, concerns of stagnant labor participation and other structural issues in the U.S. Labor market persist.

Kinahan identified some key factors investors can monitor to gauge improvement in the labor market.

"One of the positive things in today's report is that we saw manufacturing and shipping — two areas Mr. Trump talked about in his campaign — both picking up this month. That's a good trend. I think those are two things we're going to keep an eye on heading into a Trump presidency."

Construction also bears watching, he added, one area where job growth was mostly flat, though some of that may be due to seasonality.