The regular monthly smorgasbord employment report released last Friday (2-5-15), continued our theme (higher rates), with even more positives than we had expected.
Digging Deeper than just the Headlines
While the USA generated 257k (first estimate, will be revised) new jobs for the month of January, the action was elsewhere.
- Average hourly earnings were up .5%, this is a huge number and very good for the employment situation as employees may FINALLY be getting a raise!
- Unemployment rate went UP (increasing labor participation rate), but that is because more people entered the workforce, again VERY good for the economy!
Higher Rates – 10 Year Yield Rises
While all of this is good news for the economy, these are headwinds for the capital markets, in the SHORT term (1-2 years) …. longer term this is very good news, as it helps support the frothy valuations and gives us more confidence that the Fed will be able to raise rates this year … FINALLY!
Janet Yellen and the other Federal Open Market Committee (FOMC) members … Raise those rates !
Have a Great Day!
John A. Kvale CFA, CFP
http://www.jkfinancialnc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225
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