Did Markets Overreact To The December U.S. Jobs Report?
2025-01-15 04:45:00 ET
Summary
- The US economy experienced higher job growth in December, but we also saw an easing in wage growth.
- Despite lower wage growth, the surge in jobs caused markets to worry about the US economy running too hot.
- I think markets overreacted to the jobs report, since inflation expectations remain relatively well-anchored.
On Friday, January 10, we got what seemed like good news in the form of the December US jobs report. From my perspective, it was a Goldilocks jobs report - strong job growth without an accompanying increase in wage inflation - but the markets took a more negative view. I believe the downturn we saw following the report was an overreaction. In this column, I explain why.
What did the report tell us?
The US economy added 256,000 jobs in December, which was far better than expected and the most in nine months. 1 This followed the November jobs report, which was downwardly revised to a still-robust 212,000 from 227,000. 2 ...
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Did Markets Overreact To The December U.S. Jobs Report?
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