Solid Manufacturing out of China and US non-farm wages are rising
Graham Cross, CEO
The first full week of the new year brought good news in the form of solid manufacturing numbers out of China. Over in the US, non-farms payroll data disappointed a little but wages are rising at a healthy pace.
Caixin, the Beijing-based financial information group, describes manufacturing companies in China as having ‘reported the strongest upturn in operating conditions since January 2013 at the end of 2016’. Furthermore ‘production expanded at the fastest pace in nearly six years, supported by a solid increase in total new work’.
The US non-farms payroll figure of 156,000 comes in below expectations but, on balance, the positives outweigh the negatives. For a start, November’s estimate was revised up from 178,000 to 204,000 bringing the average for the last 3 months to 165,000 and the average for 2016 to almost 180,000. In fact, the Wall St Journal reports that this is the 75th consecutive month of positive jobs growth – the longest on record (dating back to 1939). A long-anticipated acceleration in wage growth is now with us and is edging toward the 3.0 percent mark.
Barack Obama will leave office having overseen close to 7 million jobs created and a halving of the unemployment rate from 10.0 percent to 4.7 percent. He leaves just as a long-anticipated acceleration in wage growth and hitherto subdued inflation boosts real incomes.
The week ahead provides us with an opportunity to catch up with British trade and gauge US consumer confidence at the same time.