US jobs data improves but markets not biting

The headline US payroll data showing a monthly addition of 214,000 new jobs in October fell slightly short of expectations of 230,000, but the upward revision of an additional 31,000 jobs in September made amends. Stock market reaction was muted, possibly owing to the 11% gain from the low of the October sell off, but the economic news is still good when you combine it with the associated fall in the unemployment rate from 5.9% to 5.7% and the fact that the labour participation rate rose to 62.8%. The Fed and the markets assess both these numbers in conjunction to get a reasonable idea of what is happening and, whilst this is all going well, we do not expect the central bank to raise interest rates until there is a pick up in real wage growth.