U.S. job growth likely to remain upbeat in December, annual wage growth to rise too

Jobs growth in the United States is expected to have remained upbeat during the month of December, in line with the recent trend.

Job growth is expected to have been around 170,000 in line with the recent trend. The unemployment rate fell to 4.6 percent in November, the lowest level post-crisis. However, as this was due partly to a declining labour force, the unemployment rate is estimated to have risen back to at least 4.7 percent in December, Danske Bank reported.

Average hourly earnings declined surprisingly in November, due mainly to falling wages among supervisory workers. In 2016, wage inflation for non-supervisory and production workers (constituting 82% of the workforce) was flat. This is possibly due to some degree of compositional effect of low wage workers re-entering employment.

We estimate average hourly earnings increased 0.2 percent m/m in December, implying an increase in the annual wage growth rate to 2.6 percent y/y, from 2.5 percent y/y in November.

Meanwhile, the dollar index traded at 101.67, up 0.15 percent, while at 8:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bearish at -75.83 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex