- Today's payroll employment report was a strong beat - the number of jobs created in December was +256k (vs. 160k expected) and the unemployment rate fell to 4.1% (vs. 4.2% consensus)
- In further good news, the prime-age employment rate rose to 80.5% stopping its decline over the previous two months
- Looking under the hood of payroll growth, private payrolls ex-health care and private education grew 143k in December (its strongest month since March 2024) primarily driven by rises in retail trade (+43k), professional services (+28k), and leisure & hospitality (+43k)
- Alternative data agree with this strong labor report - our clients knew overall activity was higher in December (0.33Z increase vs. trend). but the rest of the labor market remains mixed - we see worker anxiety as still high and employer demand not ticking up as strongly yet as the Nov JOLTS vacancies data suggest, even though people are now a little more likely to quit
- “Data dependence” will be vital again this year with the second moment or uncertainty more likely to matter via term premiums - more on that soon! We are closely watching our real-time indicators to see if the uptick we saw last month (and validated by today's data) constitutes a sustained acceleration in economic growth
- MacroX's real-time economic activity and labor market metrics (including our alternative data versions of the JOLTS variables) will alert us well before traditional government data if any acceleration is indeed occurring. If you would like access to these as well as many other metrics (including a real-time undocumented immigration tracker), sign up for our waitlist by using this link https://macrox.ai/try-macro-x/?utm_source=substack&utm_medium=email. Alternatively, DM us or comment on this post.
