United States Employment Statistics (December 2021) Recovery Continues

The month-on-month increase in non-farm payrolls from the Establishment Survey was +199 thousand.

The month-on-month increase in non-farm employment from the Household Survey was +476 thousand. (Red line in the graph)

The month-on-month increase in non-farm payrolls from the Establishment Survey slowed somewhat, but the growth continues.

The month-on-month increase in non-farm employment from the Household Survey is recovering smoothly. Accordingly, the unemployment rate is also falling.

The most worrying aspect of the Employment Situation is the wage growth rate. If jobs are tight, wages should rise. Also, a wage-price spiral is easy to trigger.

Wage growth is sufficiently high.

Chair Powell, a little while ago, said something unclear and was cautious about rate hikes.

・Even if employment returns to pre-COVID levels, it might be maximum employment.

・Even with a low unemployment rate, it cannot be said to be maximum employment.

・Wage growth continues, but there are no signs yet of a wage-growth spiral.

However, now, this result supports the case for fast pace of policy rate normalization and for accelerating the start of the Fed's balance sheet reduction.

In response, with the economy maintaining its vigor, stock prices have undergone valuation adjustments but are holding up. Interest rates are rising.

Yet, strangely, the dollar is weakening. I do not understand the reason either.

On December 26, 2021, I wrote 'Dollar/Yen exchange rate and speculative positions—anomaly', and it is precisely an anomaly.