On the December Jobs Report
https://trendmacro.com/system/files/reports/20190104TrendMacroLuskin-3D.pdf
Friday, January 4, 2019
A huge beat relieves the stench of impending recession. We face the risks from strength.
US Macro
Federal Reserve
Today’s 312,000 net payroll gains make the best December in this business cycle, and are an even more impressive beat versus the consensus considering that the prior two months were revised up by 57,000. Weather had nothing to do with it. The labor force participation rate rose with 419,000 new entrants to the labor force, which caused the unemployment rate to uptick from 3.7% to 3.9%. The economy is manifestly not running out of workers. That should offset strong hourly wage gains in Powell’s mind – but no matter, he has cut a deal with Mnuchin. The US economy faces real tail-risks, but we start from a position of strength.