US: NFP shows a jump in employment – RBC

Nathan Janzen, a senior analyst at RBC Economics, analyzes the recent Nonfarm payrolls data released in the US, as he does not wait for Fed action at this moment. EUR/USD fell slightly on the release, down to 1.0950, a year-to-date low.

Key quotes

“US labour markets showed little evidence of softening in early 2020.  The 225k jump in employment was a bounce-back after a slower 147k increase the prior month.” 

“The unemployment rate edged up to 3.6% from 3.5%, but that is still right around multi-decade lows and down almost half a percentage point from a year ago.” 

“Wage growth edged up in January, rising to 3.1% year-over-year from 3.0% in December.”

“We still think the pace of economic growth will be increasingly limited by supply-side capacity limitations.” 

“There is little apparent reason for monetary policymakers to consider rate cuts at the moment, and we continue to expect the Fed to sit on the sidelines through 2020.”