U.S. Job Report: What Do Higher Numbers Mean?
The U.S. Department of Labor released the December jobs report this morning. Non-farm jobs are up by a surprising 167,000---while the unemployment rate is unchanged at 4.5%. Analysts had expected about 100,000 jobs for December. CNBC’s "Squawk Box" team sifted though all the data and explained what the numbers mean going forward.
Jack Bouroudjian is from the Brewer Investment Group. He said this is good news and bad news, “It’s great to see all this job news. Hourly earnings were a little hotter than expected and the market is looking for a reason to correct. Fed minutes released the other day had inflation concerns written all over them and this unemployment (number) won’t help that.”
CNBC's Steve Liesman called this an El Capitan moment. That’s because the 30-year bond yield charts look like a sheer cliff (). Investors were banking on weakness in these numbers.
Liesman added that the manufacturing sector was unchanged suggesting that it’s the service sector driving these numbers.
Mark Zandi--Chief Economist from Moody's Economy.com--said weather played a role here. “Construction was down only 3K – it should be down something like 30 to 35k….so at least 30,000 jobs is due to weather. The reality is that we’re running around 125,000 (as compared to the 167,000 number released this morning). At that rate of growth the unemployment rate isn’t going anywhere.”
Zandi also said that business services are a really strong part of the economy. But the goods side of the economy is soft..."and it’s softer than these data suggest."
CNBC's Ron Insana said “If you look at what’s going on in commodity prices there’s a signal of a slowdown in demand for key things like housing and autos. Oil is coming down not just on weather there could be slowing demand involved in that too – I’m not sure the economy sustains itself well into next year…I think the economy moderates over time.”