US NFP: market focuses on a fall in average earnings

•US NFP: market focuses on a fall in average earnings

–NFP were up 252k, beating estimates. Nov and Oct were revised up, too

–Average work week held steady

–BUT the dominant factor was the 0.2% mom drop in average wages (Nov was revised down too) which suggests that there is still plenty of slack in the labor market

•Fed officials don’t revise their timeline even if the market does

–Atlanta Fed President Lockhart, Richmond Fed President Lacker say that they still expect rates to rise midyear. Subject to change without notice

•Crude oil falls further

–But number of drilling rigs plunges – supply may fall next year

•Today:

–US: Labor market conditions index for December; Lockhart speaks again

•This week:

–Tuesday: Japan current account, Swedish CPI, UK CPI

–Wednesday:  Fed’s Beige Book

–Thursday: Australia unemployment, Empire State & Phili Fed indices

–Friday:  Eurozone final CPI, US CPI