The US economy continued to produce more jobs in November, keeping the US unemployment rate at a level comparable with the 1960s. There have been some recent signs of accelerating wage growth, something which is likely to have implications for US monetary policy. However, the latest report lends little in the way of further support to the theme of growing wage inflation.
According to the US Bureau of Labor Statistics, the US economy created 155,000 jobs in the non-farm sector in November. Economists had been expecting around 200,000 additional positions and US markets reacted by sending bond yields lower. By the close of business, yields on US 2-year bonds had dropped by 7bps to 2.70%, 10-year bonds had shed 4bps to 2.85% and 30-year bonds had lost 2bps to 3.14%, although the 2% sell-off of the S&P 500 had something to do with it as well. Reactions in the currency markets were less consistent and the US dollar increased against the yen and sterling but fell against the euro.
