US DATA: Surprisingly Firm AHE Growth But Hours Slide A Notable Caveat
Feb-07 14:19
- AHE growth firmly exceeded expectations in January even if rounding did exaggerate it a touch, at 0.476% M/M (cons 0.3) after a slightly downward revised 0.25% (initial 0.28%).
- Primary dealer analysts had seen a mild skew towards a hawkish surprise but no analyst had looked for stronger than 0.4% M/M.
- It translated to easily stronger than expected Y/Y growth of of 4.06% (cons 3.8) with the upward revised 4.05% Y/Y in Dec (initial 3.9%) again exaggerated by rounding.
- The non-supervisory component meanwhile, which accounts for around 80% of payrolled employees, saw 0.52% M/M in Jan after a firmly upward revised 0.33% M/M in Dec (initial 0.20%).
- With this category now rising 4.15% Y/Y after latest revisions, the two series have broadly stabilized a little above 4% Y/Y.
- However, there is an important caveat here as this monthly wage acceleration coincided with a notable further decline in average hours worked, to 34.1 from a downward revised 34.2 in Dec (considering lower hours will mechanically push the average hourly earnings of salaried employees higher). It’s a joint low with only one-month in the pandemic and was last seen in mid-2010.
- It’s all the more notable because the BLS categorically said Southern California wildfires and cold weather had no discernible effect on employment or hours worked.
- Back to broader wage growth implications, the Fed will continue to focus on other metrics such as the more comprehensive ECI but for now, the five-year average of 2% productivity is just about strong enough to keep the labor market from a source of inflationary pressure per Fed commentary of recent months. It will however likely become increasingly sensitive to further acceleration from here.
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US DATA: Surprisingly Healthy Initial Jobless Claims
Jan-08 13:58
The jobless claims data were on balance a little better than expected. New claims hit their lowest single week since Feb’24 and with the four-week average not too far off at its lowest since April, but continuing claims surprised a touch higher. It looks like the trend of companies managing headcount through slower rehiring rather than layoffs is still intact.
- Initial jobless claims surprised lower at 201k (sa, cons 215k) in the week to Jan 4 after an unrevised 211k.
- The four-week average fell 10k to 213k, its lowest since Apr’24 and through the 2019 average.
- Continuing claims on the other hand were a little higher than expected at 1867k (sa, cons 1860k) in the week to Dec 28 after a downward revised 1834k (initial 1844k).
- Timing of the festive period can make seasonal adjustment difficult but the non-seasonally adjusted 305k is at the low end of recent years.
- Note that by state, the 22.4k increase in NY (which drove the 21.3k increase in national claims) to 37.5k was in keeping with typical starts to the year.
PIPELINE: $4.25B IADB 5Y SOFR Debt Launched
Jan-08 13:56
- Date $MM Issuer (Priced *, Launch #)
- 01/08 $6B *World Bank 7Y +54
- 01/08 $4.25B #IADB 5Y SOFR+42
- 01/08 $1.5B #Kommunalbanken 5Y +48
- 01/08 $1.5B #CoE Dev Bank 5Y SOFR+42
- 01/08 $500M Novelis 5NC2
- 01/08 $Benchmark AIIB 5Y +47a
- 01/08 $Benchmark NWB 5Y SOFR+50a
- 01/08 $Benchmark Ontario 5Y SOFR+58
- 01/08 $Benchmark Northwestern Mutual 5Y +70a
- 01/08 $Benchmark Deutsche Bank 4NC3 fix/SOFR
- 01/08 $Benchmark Codelco 10Y +195a, 30Y +215a
- 01/08 $Benchmark HF Sinclair 6Y +165a, 10Y +185a
- 01/08 $Benchmark Santander UK 6.25NC5.25 +150a
- 01/08 $Benchmark Indonesia 5Y 5.65%a, 10Y 5.95%a
GBP: Cable FX Exchange traded Option
Jan-08 13:45
GBPUSD (7th Mar) 124.00p, bought for 2.05, 2.06, 2.07 in ~1.22k.
- This is already ITM, the CME contract also trades close to where the spot is, now at 123.21.
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