Bitcoin price today: inks new record high near $119k as ETF inflows surge
We estimate non-farm payrolls increased by 170,000 in November in line with the recent trend and more or less in line with the consensus of 180,000.We estimate an unchanged unemployment rate at 4.9% and that average hourly earnings increased 0.2% m/m implying an unchanged wage growth rate of 2.8% y/y.
The October report was strong, which in our view was sufficient 'further evidence' for the FOMC to raise rates in December, which is now also fully priced in by markets.
We do not see the November jobs report changing the view that Fed is going to raise rates in December.
Looking into 2017, the FOMC is turning more dovish 'on paper', which emphasises the importance of strong labour market performance and continued progress on unemployment and wage growth.
A hot labour market is viewed by several dovish FOMC members as a chance to undo some of the supply-side damage done by the great recession.
An increasing wage inflation rate will be a solid indication of increasing inflationary pressure in the economy.
Altogether, we believe the FOMC will look through accelerating wage inflation in the short term and let the labour market run a bit hot to make sure slack is fading and core inflation is moving towards (above) the two percent target.
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