Strong January Jobs Offset By Wuhan Risks; GDP Down In Q1

Strong January Jobs Offset By Wuhan Risks; GDP Down In Q1
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Summary Average 3-month and six-month jobs both now print over 200,000. Impeachment over, Brexit done, China trade deal signed. But Wuhan Coronavirus offsets those positive developments. China GDP likely to take at least a 100bps to 300bps hit in 2020Q1 from Wuhan Coronavirus, with concomitant risks to US and European creditors, particularly those holding OCDB. GDP growth deferred in the first half of 2020 because of the Wuhan virus will likely strengthen the second half, thereby turbocharging 2020Q3 and Q4. We see rising political risks on the rise in Germany and China from dissatisfaction with incumbent governments. New York (February 7th) – The January jobs report printed at a strong 225,000 new jobs, above the consensus estimate of 160,000. Revisions for November (+5,000) and December (+2,000) netted 7,000 additional new jobs. The seasonally adjusted unemployment rate ticked up slightly, to 3.6% from 3.5% in December and down 40bps from last year. The seasonally adjusted U-6 Unemployment , at 6.9%, was up 2/10th of a percentage point from December, and down 110 bps since last year. Average jobs printed up in both the three-month and six-month average categories, as shown in our chart here: Nominal year-on-year average weekly wages increased by 2.52%, at a rate higher than inflation. Real wages increased by 0.52%, assuming the 12-month Trimmed Mean PCE annual inflation rate of 2.0%. However, month-on-month nominal average weekly wages increased $2.40, or 0.024%, although average weekly hours remained steady, month-on-month, although they were down year-on-year 2/10th of an hour […]

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