Bottom line is that the US jobs market is solid

It's not a pre-crisis economy anymore. For the post-crisis era, I think this jobs report is as good as it gets. There weren't wage gains but I don't think real wage gains are ever coming.

Ahead of the numbers, I expected to see an upside skew to the report from temporary hiring because online shopping is a secular trend.

  • Employment in transportation and warehousing rose by 23,000 in December, with a gain of 15,000 in couriers and messengers.
  • Employment in professional and business services increased by 73,000 in December, with
    temporary help services accounting for 34,000 of the gain.

So between temporary hiring and UPS/FedEx/USPS hiring, that's +57K that's likely to be unwound over January and February.

The report beat by 92K and I assume that much of the temporary and courier hiring was built into the estimates that pushed the consensus up to +200K anyway.

The big picture offers more

The unemployment rate is at 5.0% but there are still way too many people outside of the workforce. That's a big drag on the economy but it's something we already knew. What's impressive is the improvement in the US jobs market over the past year. It's not just unemployment, it's every measure of unemployment and underemployment.

Compare the current numbers with a year ago.

In an economy that's only growing at 2-2.5%, that's impressive.

Looking towards 2016

The Fed has tried to caution that a slowdown in jobs growth is coming. The thing about full employment, is that it means there is less hiring because people already have jobs.

I'm not quite sure the market 'gets' that because of the obsession on jobs added/lost. If the jobs market can average +140K this year, that's good. It's about the same pace as 2003/04 when the economy (and inflation) were much healthier.