Equity futures are pointing towards another upbeat start for the U.S. equity market, which has advanced to new record highs in each trading session this week. The S&P 500 futures are hovering 10 points, or 0.3%, above fair value. Coming into today's session, the S&P 500 holds a week-to-date gain of 1.9%.
The Employment Situation report bucked the longstanding trend of above-consensus headline growth and lagging wage growth in the December release.
With the labor market believed to be approaching full employment, disappointing headline readings could become more commonplace. This would be indicative of employers struggling to find workers with the right skillset, which in turn should translate into upward pressure on wages.
The notable headlines from the Employment Situation Report are as follows:
- December nonfarm payrolls increased by 148,000 (Briefing.com consensus 188,000). Over the past three months, job gains have averaged 203,700 per month
- November nonfarm payrolls revised to 252,000 from 228,000
- October nonfarm payrolls revised to 211,000 from 244,000
- December private sector payrolls increased by 146,000 (Briefing.com consensus 185,000)
- November private sector payrolls revised to 239,000 from 221,000
- October private sector payrolls revised to 222,000 from 247,000
- December unemployment rate was 4.1% (Briefing.com consensus 4.0%) versus 4.1% in November
- Persons unemployed for 27 weeks or more accounted for 22.9% of the unemployed versus 23.8% in November
- December average hourly earnings were up 0.3% (Briefing.com consensus 0.3%) after increasing a revised 0.1% (from 0.2%) in November
- Over the last 12 months, average hourly earnings have risen 2.5%, in-line with 2.5% for the 12 months ending in November
- The average workweek in December was 34.5 hours (Briefing.com consensus 34.5) versus 34.5 hours in November
- December manufacturing workweek ticked down to 40.8 hours from 40.9 hours in November
- Factory overtime was unchanged at 3.5 hours
- The labor force participation rate was 62.7% in December, unchanged from November
In addition, investors received the November Trade Balance, which showed a larger-than-expected deficit of $50.5 billion (Briefing.com consensus -$47.9 billion). Today’s last economic reports--November Factory Orders (Briefing.com consensus +1.4%) and the ISM Services Index (Briefing.com consensus 57.6)--will be released at 10:00 AM ET.
U.S. Treasuries are now trading modestly higher following the economic data, reclaiming losses from earlier in the morning. The yield on the benchmark 10-yr Treasury note is down one basis point at 2.44% after trading around 2.46% earlier. Yields move inversely to prices.
Meanwhile, West Texas Intermediate crude futures are down 0.8% at $61.52 per barrel after closing Thursday at a three-year high. The energy sector has been the top-performing sector on Wall Street this week, but could face some selling today if crude remains under pressure.
Elsewhere, equity indices in the Asia-Pacific region ended Friday on a positive note, with Japan's Nikkei (+0.9%) pacing the advance, finishing at a 26-year high. The major European bourses are also on track to end in the green with Germany's DAX (+1.1%) showing relative strength.