The biggest data point of the last week came on Friday with the December payroll employment report that revealed decelerating wage growth. Annual wage growth was 4.6%, the slowest gain since August 2021. The economy added 223,000 jobs in December and the unemployment rate edged down to 3.5%. Leisure and hospitality, health care, and construction sectors all added sizable job gains. Slowing wage growth will help inflation ease further, good news for the Fed and one of the potential tailwinds for 2023. This is a bullish signal for the US stock market.
Trading recommendation: buy 3885 and take profit 3990.
The gold ball is back on track, with the yellow metal scaling near seven-month high, as moderating U.S. jobs growth signaled more slowing of rate hikes by the Federal Reserve. U.S. nonfarm payrolls grew by 223,000 last month, some 40,000 below November’s level and by the smallest number since the 199,000 positions added in December 2021, the Labor Department reported. But market punters still bet on the central bank doing a rate hike as small as 25 basis points at its next policy decision in February, after a 50-basis point hike in December and four back-to-back hikes of 75 basis points between June and November.
Trading recommendation: buy 1859 and take profit 1892.
A jump in the workforce and easing wage growth suggests the U.S. job market is starting to move the way the Federal Reserve has hoped it will, to bring the supply and demand for workers into better balance and help in its battle against inflation. After a year in which many basic metrics of the jobs market stalled at levels the U.S. central bank feels are inconsistent with stable prices, employment data for December published brought a hint of relief. The jobs report is the embodiment of the soft-landing narrative - this idea that can you have a strong labor market with slowing wage growth. This is a positive signal for the oil market.
Trading recommendation: buy 74.80 and take profit 77.50.