Weekly Economic Commentary
John Canally Chief Economic Strategist, LPL Financial
Last Friday, January 9, 2015, the United States Bureau of Labor Statistics (BLS) released its monthly Employment Situation report, providing financial markets and the public at large with the state of the labor market as 2014 ended. The U.S. economy created another 252,000 net new jobs in December 2014 and 3 million over the course of 2014. More net new jobs were added in 2014 than in any year since 1999 [Figure 1]. The unemployment rate fell to 5.6% in December 2014, the lowest reading since mid-2008.
Although the labor market has improved markedly over the past year or so, it still has a long way to go to get back to “normal,” and the Federal Reserve (Fed) is unlikely to begin raising rates until a broad range of labor market indicators are back to normal or on track to get back to normal. In our Outlook 2015: In Transit, we noted that Fed Chair Janet Yellen and the other members of the Federal Open Market Committee (FOMC) are tracking a “broad range” of labor market indicators. (See pages 10 – 11 of the Outlook for details.) Eleven of these indicators were updated with last Friday’s release, with six of them improving versus November 2014, four deteriorating, and one remaining the same.
In an otherwise solid report, one of the big disappointments was the deceleration in wage growth as measured by the year-over-year change in average hourly earnings. Hourly earnings decelerated from 1.9% year over year in…
Read the Full Report here: Economic Commentary 01122015