Investment Clock insights

US payrolls

Ian Kernohan

2 December 2016

With a December hike in US interest rates fully priced into markets, the latest set of payrolls would have to have been extremely weak to impact expectations. In the event, the three month average of payroll growth remains a respectable 175,000, the unemployment rate has fallen to just 4.6%, with average hourly earnings growth falling to 2.5% year on year. The Fed will hike rates on 14 December and the market will move on to speculating on the timing and direction of the next move. With rising treasury yields impacting mortgage rates, other central banks still easing policy, and uncertainty over the scale and timing of any Trumpflation stimulus, we expect the Fed to remain cautious with the pace of rate hikes next year.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.