Wage and employment growth exceed expectations - Nomura

Analysts at Nomura explained that January’s employment report shows that 2017’s economic momentum carried into 2018 as nonfarm payrolls grew 200k, in line with our expectations. 

Key Quotes:

"However, wage growth was a more important development. Average hourly earnings increased 0.3% m-o-m, coupled with positive revisions to past months that contributed to an acceleration of the 12-month change rate to 2.9% in January, the fastest pace during the recovery. 

Part of the wage acceleration was likely due to idiosyncratic factors, but wage growth appears to show signs of picking up after a lackluster 2017. The unemployment rate remained unchanged at 4.1%, above our forecast, but the strong job market will likely continue to put downward pressure on the unemployment rate in the months ahead."