2ndFebruary 2024
Friday
On February 2nd, the UnitedStates is scheduled to release several key economic indicators, including themonthly Average Hourly Earnings, Non-Farm Employment Change, Unemployment Rate,and the Revised University of Michigan Consumer Sentiment.
USD - AverageHourly Earnings m/m
This is a primary indicator of consumer inflation. Generally, when businesses incur higher labor costs, these increased expenses tend to be transferred to the consumer.
In December 2023, the average hourly earnings for all employees in the US private nonfarm sector saw an increase of 15 cents, a 0.4% rise, bringing the rate to $34.27. This increment matched the rate observed in the previous month and exceeded the market expectations of a 0.3% rise. For private-sector production and nonsupervisory employees, the average hourly earnings increased by 10 cents, or 0.3%, reaching $29.42. Looking at the year-over-year data, there has been a 4.1% increase in average hourly earnings, a slight acceleration from the 4% rise noted in the previous month and surpassing the anticipated 3.9% increase.
The projection for the AverageHourly Earnings m/m suggests a modest decline to 0.3%, down from the previous figure of 0.4%.
The upcoming release of the AverageHourly Earnings m/m data is scheduled for February 2nd at 1:30 PM GMT.
The last time, the US AverageHourly Earnings m/m was announced on the January 5th at 1:30 PM GMT.You may find the market reaction chart (USDJPY M5)below:
USD - Non-Farm EmploymentChange
The creation of jobs serves as a crucial early sign of consumer spending, a major driver of the overall economy.
In December 2023, the US job market outperformed expectations, adding 216,000 jobs. This figure not only exceeded the revised total of 173,000 jobs from the previous month but also surpassed market predictions of 170,000 jobs. There was a notable expansion in several sectors: government employment rose by 52,000 jobs, the leisure and hospitality sector added 40,000, health care increased by 38,000, social assistance by 21,000, and construction by 17,000. However, the transportation and warehousing sector saw a decrease of 23,000 jobs. Industries such as mining, manufacturing, and financial activities remained relatively stable with little change. Throughout 2023, the economy gained 2.7 million jobs, marking the smallest yearly growth since 2019, if we exclude the pandemic year. This equates to an average of 225,000 jobs each month, with significant contributions from the government and health care industries. The growth in leisure and hospitality was less than in 2022 and remains 163,000 jobs short of its pre-pandemic level.
TL;DR
Sector
Job Change in December 2023
Notes
1 Total Job Additions
+216,000
Exceeded previous month's revised total and market predictions
2 Government
+52,000
Significant increase
3 Leisure and Hospitality
+40,000
Continued expansion
4 Health Care
+38,000
Notable growth
5 Social Assistance
+21,000
Positive change
6 Construction
+17,000
Increase in jobs
7 Transportation and Warehousing
-23,000
Decrease in jobs
8 Mining, Manufacturing, Financial Activities
Little to no change
Stable sectors with minimal job changes
9 Yearly Total (2023)
2.7 million jobs
Smallest annual growth since 2019, excluding pandemic year
10 Monthly Average (2023)
225,000 jobs
Major contributions from government and health care sectors
11 Leisure and Hospitality (compared to pre-pandemic)
163,000 jobs short
Less growth compared to 2022, still below pre-pandemic levels
Projections for the Non-FarmEmployment Change suggest a decline to 175,000, down from the previous figure of 216,000.
The upcoming release of the Non-FarmEmployment Change data is scheduled for February 2nd at 1:30 PM GMT.
The last time, the US Non-FarmEmployment Change data was announced on the January 5th at 1:30 PM GMT. You may find the market reaction chart (USDJPY M5) below:
USD -Unemployment Rate
While often seen as a trailing indicator, the unemployment rate is a key measure of the economy's overall health, as consumer spending closely relates to the state of the labor market. Additionally, unemployment levels are a critical factor for policymakers guiding the nation's monetary policy.
In December 2023, the unemployment rate in the United States remained steady at 3.7%, consistent with the previous month's figure and marginally below the market expectation of 3.8%. This stability was partly due to a decrease in new entrants to the workforce. The labor force participation rate saw a slight decline, falling to 62.5% from 62.8% in November. Moreover, the number of unemployed individuals experienced a minor increase of 6,000, bringing the total to 6.27 million. Concurrently, there was a reduction in the number of employed individuals, which decreased by 683,000 to a total of 161.2 million.
TL;DR
Metric
December 2023 Value
Change from Previous Month
Market Expectation
1 Unemployment Rate
3.7%
Unchanged
Below expectation of 3.8%
2 Labor Force Participation Rate
62.5%
Decreased from 62.8%
-
3 Number of Unemployed Individuals
6.27 million
Increased by 6,000
-
4 Number of Employed Individuals
161.2 million
Decreased by 683,000
-
Projections for the UnemploymentRate suggest it will remain steady at the same level as before, 3.7%.
The next release of the UnemploymentRate data is scheduled for February 2nd at 1:30 PM GMT.
The last time, the USUnemployment Rate data was announced on the January 5th at 1:30 PM GMT. You may find the market reaction chart (USDJPY M5)below:
USD - RevisedUoM Consumer Sentiment
Consumer financial confidence, a key predictor of consumer expenditure which forms the bulk of total economic activity, is gauged through a survey of approximately 500 consumers. This survey asks participants to evaluate the current and future economic conditions.
In January 2024, the University of Michigan's consumer sentiment index in the US reached a peak of 78.8, its highest since July 2021. This marked a significant increase from 69.7 in December and exceeded the anticipated figure of 70, as per preliminary data. This boost in consumer sentiment is attributed to growing confidence that inflation is easing and income expectations are improving. Inflation expectations for the upcoming year decreased to 2.9%, the lowest since December 2020, down from 3.1% in the preceding month. Additionally, the five-year inflation outlook slightly fell to 2.8% from 2.9%. The component measuring future expectations jumped to 75.9 from 67.4, while the index for current economic conditions rose to 83.3 from 73.3. Combining the figures for January and December reveals a 29% cumulative rise in consumer sentiment, the largest two-month increase since the 1991 recession's end. For the second month in a row, all five components of the index saw increases, including a 27% jump in short-term business conditions outlook and a 14% rise in perceptions of current personal finances.
TL;DR
Indicator
January 2024 Value
Change from December
Notes
1 Consumer Sentiment Index
78.8
+9.1
Highest since July 2021, exceeded expectations
2 Inflation Expectation (Next Year)
2.9%
-0.2%
Lowest since December 2020
3 Five-Year Inflation Outlook
2.8%
-0.1%
Slight decrease from previous month
4 Future Expectations
75.9
+8.5
Significant increase from previous month
5 Current Economic Conditions
83.3
+10.0
Marked improvement from December
6 Cumulative Rise in Consumer Sentiment (Dec-Jan)
29%
-
Largest two-month increase since post-1991 recession
7 Short-Term Business Conditions Outlook
-
27% increase
-
8 Perceptions of Current Personal Finances
-
14% increase
-
The expectation for the RevisedUoM Consumer Sentiment for the forecast stands at 78.8.
The revised University ofMichigan Consumer Sentiment data is scheduled for release on February2nd at 3:00 PM GMT.
The last time, the Universityof Michigan Consumer Sentiment data was announced on the December 22nd at 3:00 PM GMT. You may find the market reaction chart (EURUSD M5) below:
Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.
