US: A bit strange market reaction to NFP – Nordea

The strong labour market report led to lower longer-term bond yield and falling equities but analysts at Nordea think the reading has not caused too much disappointment.

Key quotes

“Nonfarm payrolls increased 225k in January, up from an upward-revised 147k in December.”

“The unemployment rate rose to 3.6% from 3.5% and the broader U6 unemployment rate rose to 6.9% from 6.7%, and hence not all the people that returned to the labour force were able to immediately get a job.”

“Average hourly earnings rose 0.2% m/m, slightly slower than anticipated, but due to revisions it increased to 3.1% y/y from an upward-revised 3.0% y/y in December.”

“We view today's numbers as strong and they should dent market expectations of more Fed easing.”

“Markets reacted with lower longer-term bond yields and falling equities, which seems a bit strange given the strong labour market report but we still doubt that this labour market report has led to much disappointment.”