Market Commentary 2023

20 December 2023

UK inflation rate falls below 4%

UK inflation rate falls below 4%
UK inflation dropped more than expected to 3.9%, down from October's 4.6%, the lowest year-on-year increase since September 2021.
In November, UK inflation dropped more than expected to 3.9%, down from October's 4.6%, the lowest year-on-year increase since September 2021. Core inflation, excluding energy and food, also decreased to 5.1%. The figures fuel speculation about the Bank of England (BoE) cutting rates in 2024, following a recent flurry of rate hikes. They however remains cautious, emphasising the need for conclusive evidence that inflation is beaten. At this juncture, market participants are anticipating a first rate cut in May, with a 50% chance of a cut in March. On the data being released, the pound fell against the dollar, while...

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12 December 2023

US inflation holding steady

US inflation holding steady
US CPI dipped slightly in November to 3.1% annually, just below October's 3.2% pace. The core rate held steady at 4%. On a monthly basis, prices rose 0.1%, marginally above flat expectations.
US CPI dipped slightly in November to 3.1% annually, just below October's 3.2% pace. The core rate held steady at 4%. On a monthly basis, prices rose 0.1%, marginally above flat expectations. There were no major surprises across categories. Food and energy price hikes moderated while shelter costs remained high. The 'super core' services inflation measure increased monthly and annually, signalling some lingering pricing pressures. For the Federal Reserve, this report likely does not significantly sway the policy outlook. Officials have consistently stated inflation will be bumpy as it declines. Some cooling in certain areas paired with persistent inflation in...

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15 November 2023

UK inflation falls dramatically to 4.6%

UK inflation falls dramatically to 4.6%
UK inflation slowed more than expected to 4.6% in October, below predictions and well under September's 6.7%, mostly attributed to lower energy prices.
UK inflation slowed more than expected to 4.6% in October, below predictions and well under September's 6.7%, mostly attributed to lower energy prices. The core CPI rate however, excluding energy and food, also decreased, and the overall trend aligns with a global slowdown in inflation, following on from similar data in the US yesterday. Prime Minister Rishi Sunak claimed success in halving inflation by year-end. The drop in inflation is positive ahead of the government's Autumn Statement but did see sterling dip as markets believe the Bank of England won't raise interest rates further. The Bank of England remains cautious...

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14 November 2023

Stocks rally as US inflation rate recedes

Stocks rally as US inflation rate recedes
The US Consumer Prices Index (CPI) rose by 3.2% in October, below the expected 3.3% and down from September's 3.7%. Core inflation, excluding food and energy, fell to 4.0%, the lowest since September 2021.
The US Consumer Prices Index (CPI) rose by 3.2% in October, below the expected 3.3% and down from September's 3.7%. Core inflation, excluding food and energy, fell to 4.0%, the lowest since September 2021. Monthly CPI was unchanged in October compared to September, signalling a slowdown. This data may ease concerns about inflation, potentially bringing forward future rate cuts. The Federal Reserve, which recently held its benchmark interest rate steady, remains cautious, with Fed Chair Jay Powell emphasising a data-driven approach and the possibility of tightening monetary policy further if needed. Despite the slowdown in inflation, the Fed is expected...

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3 November 2023

US nonfarm payrolls cool to 150,000 jobs added

US nonfarm payrolls cool to 150,000 jobs added
The US economy begun to show its first cracks as its unemployment rate climbed to 3.9%, whilst nonfarm payrolls increased modestly to 150,000, a downward shift from the 297,000 in September. The US services sector also expanded at the weakest pace in five months, with wage growth also slowing.
The US economy begun to show its first cracks as its unemployment rate climbed to 3.9%, whilst nonfarm payrolls increased modestly to 150,000, a downward shift from the 297,000 in September. The US services sector also expanded at the weakest pace in five months, with wage growth also slowing. The current signs of a cooling labour market and a contraction in services support the narrative that the Federal Reserve has reached peak rates. Two-year treasury yields declined to 4.87% (price goes up, yields come down), and 10-year treasury yields retreated to 4.52%. The latest US economic data show that interest...

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3rd November 2023

Bank of England votes to keep rates on hold ….again

Bank of England votes to keep rates on hold ….again
UK Bank of England have taken the decision to keep rates on hold at the 5.25% level. This is the second meeting of the committee in which they have chosen not to increase the rate which has been well received by the bond market which has rallied on the news.
The UK Bank of England have taken the decision to keep rates on hold at the 5.25% level. This is the second meeting of the committee in which they have chosen not to increase the rate which has been well received by the bond market which has rallied on the news. Whilst a pause is not a cut in rates there is now speculation building that the next move from the bank will be to start cutting interest rates but that’s not going to happen for a while yet or if the UK economy suddenly falls into a recession.

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2nd November 2023

US Federal Reserve Holds Interest rates above 5%

US Federal Reserve Holds Interest rates above 5%
The US Federal Reserve voted to hold interest rates at a 22-year high. The Fed's decision reflects a balancing act between economic strength and inflation worries, maintaining a cautious approach to potential future monetary policy adjustments.
The US Federal Reserve voted to hold interest rates at a 22-year high. The Fed's decision reflects a balancing act between economic strength and inflation worries, maintaining a cautious approach to potential future monetary policy adjustments. The Fed remains cautious about further tightening to combat inflation, considering robust economic indicators like a strong labour market and high consumer spending. Though inflation has eased from its peak, persistent concerns remain. On the news, we observed a resurgence in tech stocks, gaining back some of their recent losses as broad equities and bonds finished the day strongly up.

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31st October 2023

Eurozone inflation now at two-year low

Eurozone inflation now at two-year low
In October, euro zone inflation fell to a two-year low of 2.9%, dropping from 4.3% in the previous month, below economist estimates. Core inflation, excluding volatile food and energy prices, decreased to 4.2% from 4.5%.
In October, euro zone inflation fell to a two-year low of 2.9%, dropping from 4.3% in the previous month, below economist estimates. Core inflation, excluding volatile food and energy prices, decreased to 4.2% from 4.5%. The highest annual rates were in food, alcohol & tobacco (7.5%) and services (4.6%). Energy prices notably dropped. The euro zone has been contending with persistently high inflation over the last 18 months, peaking at 10.6% in October 2022. The European Central Bank responded with ten consecutive interest rate hikes, reaching a record high of 4%, but paused last week despite potential energy cost risks...

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6th October 2023

US posts record job numbers in September

US posts record job numbers in September
US job creation surged in September by 336,000 jobs being created against an expectation of just 170,000. The odds for another US rate hike in 2023 once again moved higher as US bonds and equities sold off.
US job creation surged in September by 336,000 jobs being created against an expectation of just 170,000. Again, this is a positive for the US economy which continues to grow with more and more people employed. On the flip side this spells bad news for those waiting for a bond market rally and interest rate cuts as a stronger economy suggests a more stubborn inflation picture for a longer period of time. The odds for another US rate hike in 2023 once again moved higher as US bonds and equities sold off.

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21st September 2023

UK inflation falls more than expected in August.

UK inflation falls more than expected in August.
UK inflation dropped more than expected on Wednesday which will come as a welcome surprise to market participants and UK citizens. Core inflation which excludes volatile components like food and energy fell to 6.7% from 6.8% in July and certainly in contrast to what investors were predicting for August which was a rise up to 7%.
UK inflation dropped more than expected on Wednesday which will come as a welcome surprise to market participants and UK citizens. Core inflation which excludes volatile components like food and energy fell to 6.7% from 6.8% in July and certainly in contrast to what investors were predicting for August which was a rise up to 7%. This positive move back towards the central banks 2% target is welcome and should prompt the Bank of England on Thursday to hold rates steady at 5.25% rather than raising rates again to 5.5%

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20th September 2023

Bank of England keeps interest rates steady in September.

Bank of England keeps interest rates steady in September.
The Bank of England has, off the back of the surprise reduction in UK inflation, decided to not raise rates in the UK at their September meeting. The market was largely expecting the central bank to raise rates by another 0.25% to take the rate to 5.5%.
The Bank of England has, off the back of the surprise reduction in UK inflation, decided to not raise rates in the UK at their September meeting. The market was largely expecting the central bank to raise rates by another 0.25% to take the rate to 5.5%. This move has been taken as a sign the UK is at or near the top of its interest rate hiking cycle which will come as a relief to many. The market battle will now be to gauge how long the rate stays this high before they start to come back down again.

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5th September 2023

Stability in the US Jobs Market

Stability in the US Jobs Market
The US job market remains steady despite record-high interest rates, with 187,000 jobs added in August, matching July's numbers. President Biden praised the strong job growth, surpassing economist expectations of 170,000 new jobs.
The US job market remains steady despite record-high interest rates, with 187,000 jobs added in August, matching July's numbers. President Biden praised the strong job growth, surpassing economist expectations of 170,000 new jobs. The Federal Reserve closely watches the labour market and inflation. Interest rates have been raised 11 times in under two years, reaching 5.25% to 5.5%, impacting mortgage and loan costs. Certain industries like healthcare and hospitality continue to grow, while transportation and warehousing suffered job losses due to Yellow trucking company's bankruptcy. Recent data suggests a slowing labour market, with fewer job openings and private sector job...

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11th August 2023

US producer-price inflation figures surprise to the upside

US producer-price inflation figures surprise to the upside
The latest US producer-price inflation figures for July came in a little stronger than expected, with final demand year-on-year at 0.8% compared to a forecasted 0.7%, largely due to stronger performance within the services sectors.
The latest US producer-price inflation figures for July came in a little stronger than expected, with final demand year-on-year at 0.8% compared to a forecasted 0.7%, largely due to stronger performance within the services sectors. The energy component was up the least on the month, suggesting the rally in commodities has yet to feed through, whilst trade services were up the most. Unfortunately for markets, much of the upside momentum has been sapped, with the technology sector weighing in on US equity markets. Moving forward, a key focus will be the Federal Reserve's next rate decision due in September, which...

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10th August 2023

Another downside beat in US inflation

Another downside beat in US inflation
The latest US inflation print for July shows a beat towards the downside and a signal that inflationary pressures are continuing to ease. Headline inflation came in at 3.2% and core at 4.7% beating estimates of 3.3% and 4.8% respectively.
The latest US inflation print for July shows a beat towards the downside and a signal that inflationary pressures are continuing to ease. Headline inflation came in at 3.2% and core at 4.7% beating estimates of 3.3% and 4.8% respectively. Whilst inflation remains above the Federal Reserve’s 2% target the latest figures support calls for a pause in rates. Markets had priced in another 0.25% increase in the Fed Funds rate; however, markets are now lowering the odds of a further hike this year. Meanwhile weekly jobless claims rose to 248,000, which topped estimates and illustrates the view that the...

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3rd August 2023

UK central bank raise interest rates to 5.25%

UK central bank raise interest rates to 5.25%
The UK’s Bank of England has raised interest rates by another quarter percentage point to 5.25%. The market was largely expecting this and so little moved on the announcement. This rate takes the UK into more restrictive policy which should increase the chance of a UK recession at the back end of the year into 2024 but the economy and importantly the employment market remains in a solid state. Investors are positioned for around another 0.75% of rate hikes before they believe the central bank will be finished with rate hikes but TAM believe this is somewhat overdone with the...

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19th July 2023

UK inflation beats expectations

UK inflation beats expectations
The UK's inflation rate unexpectedly cooled to 7.9% in June, reaching the lowest level in over a year. The Bank of England is likely to take note of this development and could adopt a more cautious approach to further interest rate hikes. However, it's important to remain cautious as inflation remains significantly above the Bank of England's target of 2%, suggesting the possibility of additional rate increases in the future. For investors, these developments present both opportunities and challenges. Sectors heavily impacted by high inflation, such as food, energy, and hospitality, may experience some relief, potentially offering investment opportunities. Conversely,...

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13th July 2023

US Inflation beats estimates on the downside

US Inflation beats estimates on the downside
The latest inflation print showed more signs of prices easing in June with headline inflation at 3%, whilst core inflation was at 4.8% from a year ago. Although inflation remains above the Federal Reserve’s 2% target, it delivers hopes that the rate hiking cycle can soon end. It also brings into question whether the Fed will need to hike again after its planned 0.25% hike in July. However, wage growth and labour market resilience has been a huge driver for sticky inflation. Until these drivers become more subdued, a 2% target for inflation will prove to be a challenge and...

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30th June 2023

US inflation cools

US inflation cools
The personal consumption expenditures (PCE) price index rose 0.1% in May, whilst core PCE (excludes food and energy) rose 0.3% and 4.6% from a year earlier. These figures provide a glimmer of progress that US inflation is continuing to ease, and that consumer spending is showing signs of weakness. Though there is evidence that some areas of the economy are becoming more disinflationary, inflation still remains above the Fed's 2% target. In light of that, central banks have indicated that at least two more interest rate hikes are expected this year. US equity markets reacted favourably to the latest PCE...

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22nd June 2023

BOE surprise rate hike of 0.5%

BOE surprise rate hike of 0.5%
The BOE unexpectedly hiked interest rates by a half-point as they ramp up efforts to tame stubbornly high inflation. The move came as a surprise to markets which only priced in a 60% chance of a 0.25% hike. Putting the UK in an even more precarious position, they now remain an outlier with a CPI print four times the 2% target. Key rates are now expected to peak at 6.25% with no rate cuts in sight for 2023. Core inflation and wage growth has continued to show resilience even as the BOE has raised rates to levels not seen since...

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21st June 2023

UK inflation remains hot and elevated

UK inflation remains hot and elevated
Headline UK inflation unexpectedly held at 8.7%, whilst core inflation (which strips out food and energy prices) rose 7.1% year-on-year. The latest inflation figures paint a gloomy picture ahead for the UK economy because it's likely the BOE will need to ramp up interest rates further to cool inflation. In other words, a recession may be necessary to prevent prices rising too fast. The inversion in gilt yield curves is also widening, a reaffirming sign that a recession is looming if not already in one. The next monetary policy committee meeting will take place on the 22nd of June where...

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2nd June 2023

US Jobs post 14th month of beats

US Jobs post 14th month of beats
The US employment market added in 339,000 jobs against expectations of only 195,000. This once again shows a huge increase from where consensus is and clearly displays how much strength remains in the US economy which, depending on what side of the fence you are on is either good or bad news. Good news for the strength in the economy but bad news because a stronger economy is a greater signal that the economy can withstand more interest rate hikes. What investors focussed on was the unemployment number which rose more than expected to 3.7% with wage growth cooling slightly.

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12th May 2023

UK grows in Q1 but only just

UK grows in Q1 but only just
The UK suffered a 0.3% contraction in its economy in the last month of Q1, but still managed to register 0.1% GDP growth for the quarter as whole. This was due to lower energy prices, stronger global growth, and more robust consumer and corporate confidence. However, the Bank of England raised interest rates to 4.5%, a 15-year high, on Thursday and with this yet to fully impact the economy, it is too soon to sound the all-clear in terms of avoiding recession. First-quarter growth was driven by IT and construction, but government consumption and net trade were a drag on...

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10th May 2023

US inflation eases to 4.9%

US inflation eases to 4.9%
US consumer price inflation came in at slightly below expectations with a 4.9% headline year on year figure for April. This marks the lowest US print since April 2021. However, core CPI, which strips out the more volatile food and energy prices, is still rising. Shelter, which makes up roughly a third of the inflation index, is still the second highest contributor even after slight reductions in the last two months. The slight easing in data provides some evidence to the argument that the now 5-5.25% US benchmark interest rate is beginning to have the desired effect, by increasing savings...

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4th May 2023

US interest rates move up another quarter percentage point

US interest rates move up another quarter percentage point
The US Federal Reserve chair, Jay Powell took the decision to increase US interest rates by another 0.25% last night in a move which was largely expected by the market. As usual it was the language being used by the chair which was of more interest to the market. Whilst rates were raised up to 5% which is the highest since 2007, the language he used was indicative of a US central bank approaching and perhaps even at the end of raising interest rates. US bonds were boosted higher on the news but the current US regional banking crisis continues...

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28th April 2023

Eurozone sees lower than expected growth

Eurozone sees lower than expected growth
The Eurozone economy expanded by 0.1% in the first quarter of 2023, lower than the estimated 0.2% by analysts. Germany stagnated whilst France and Italy's economies grew after negative readings in Q4. Spain's economy also gathered momentum. However, inflation remained a concern, as the consumer price gains accelerated in France and Spain. Meanwhile, Germany's manufacturing sector improved due to easing supply bottlenecks and lower energy costs, but the consumer economy is slow to pick up. Portugal's GDP grew by 1.6% in Q1, buoyed by exports, while Italian GDP grew by 0.5% in Q1 due to industry and services. The European...

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12th April 2023

US Inflation remains sticky

US Inflation remains sticky
As expected, the core inflation rate remained elevated, increasing by 0.1% to reach 5.6%. The surge was mainly driven by services, excluding energy, which continued to remain at peak levels. It's worth noting that the core inflation rate has now surpassed the headline inflation rate, putting pressure on the Federal Reserve to maintain high interest rates to address the persistent core inflation. Given the upcoming economic indicators, it's still possible that the Fed will implement another rate hike. Initially, the futures market witnessed a surge of around 1% in equity indices. However, once the market opened, the gains were largely...

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11th April 2023

US Jobs created in March slows but not enough.

US Jobs created in March slows but not enough.
US jobs created in March came in on expectation at 236,000 jobs which was not the slowdown the market was looking for. This was compounded with unemployment hitting a multi decade low of 3.5%. Despite the overall creation number coming down from January and February, the market was looking for a low figure to illustrate the US economy is slowing sufficiently for the FED to stop hiking rates. In short, the March number was not weak enough to meet the markets expectations and as such the stock market’s reaction was more muted despite the jobs number coming in on consensus.

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23rd March 2023

Feds Fund rate reaches 5%

Feds Fund rate reaches 5%
As anticipated by investors, the Fed continues its fight against inflation raising rates 0.25%, not long after running up their balance sheet in an attempt to restore stability within the banking sector and shore up confidence amongst depositors. The Collapse of SVB, and now Credit Suisse have rattled markets showing us that cracks in regional banking may be enough to slow the economy further as financial conditions tighten. Yet, Powell affirmed markets that the Fed plans to maintain a foothold on bringing down inflation. Unfortunately for markets, the path to recovering has become more murky with all eyes now on...

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22nd March 2023

UK inflation remains resilient in February.

UK inflation remains resilient in February.
UK inflation has surprisingly jumped higher in February against expectations of a steady decline which will pose further problems for the Bank of England when they meet on Thursday to decide on the next round of interest rate hikes. The annual rate of inflation rose to 10.4% in February against economist expectations of a 9.9% rise. Looking at core inflation which looks at price rises excluding fuel and food saw a rise of 6.2% against an expectation of 5.7%. UK government debt has recently been rallying on the perception that the UK Bank of England would be one of the...

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16th March 2023

ECB raise rates by 0.5%

ECB raise rates by 0.5%
The European Central Bank (ECB) followed through with its promise to raise interest rates by 50 basis points on Thursday, despite the recent market turmoil caused by the collapse of Silicon Valley Bank in the United States. The central bank has been rapidly increasing rates to control inflation, with the deposit rate now standing at 3%, the highest level since late 2008. The ECB did not make any commitments for future rate hikes but emphasised the importance of a data-dependent approach. Markets have lowered their bets on the peak in the rate-hike cycle to 3.2% from 4.2% a week ago....

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15th March 2023

Chancellor Hunt delivers first budget

Chancellor Hunt delivers first budget
The Chancellor, who has been in his post since Kwasi Kwarteng's disastrous tenure last year, has endeavoured to build on increased stability with a budget aimed at stimulating growth, reducing runaway inflation and increasing employment. In terms of growth, we saw tax breaks for business research and development somewhat offset by a 6% increase in corporation tax to 25%. Labour policies surrounded increasing ability to work with a £5bn expansion of free childcare at the centre as well as efforts to persuade the sick, disabled and over 50s to join or increase participation in the job market. Lastly, the inflation...

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10th March 2023

SVB firesale sends ripples through stock markets

SVB firesale sends ripples through stock markets
A US based bank, who had issued a $2.25bn stock sale to shore up its balance sheet triggered a broader sale in large bank stocks around fears the issues would be sector wide. Essentially, the news was caused by interest rate rises and how they affect bank profitability. For most large financial institutions the benefits of interest rate rises on asset growth outweigh the larger pay-outs on customer deposits. But in the case of SVB, where their cash was heavily invested in low yielding bonds, which could not finance the bank rates needed to keep tech-startups as customers, led to...

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10th March 2023

U.S. adds 311,000 jobs in February

U.S. adds 311,000 jobs in February
There was a mixed picture in the latest US jobs report as US payrolls increased by 311,000 in February exceeding expectations, whilst monthly wage growth slowed. The jobs added in February was in stark contrast to the whopping 504,000 jobs added in January but still underscores a resilient US labour market, in which this is the 11 month where jobs added have been above forecasts. On the other hand, overall wage growth was more tempered, climbing only 0.2% from a month earlier and 4.6% year-on-year. This was a shallower increase from the previous print. Yet, despite a mixed jobs report,...

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2nd March 2023

Eurozone inflation falls but not convincingly

Eurozone inflation falls but not convincingly
Annual price growth for the Euro area, calculated by consumer price inflation, fell 0.1% from the previous month to 8.5% for February. The 8.2% consensus forecast was overshot due to 15% price growth in food, alcohol and tobacco coupled by energy prices, which despite easing slightly, were still 13.7% higher than twelve months prior. Global stocks declined and government bonds sold off on the news as investor concerns of higher interest rates for longer were stoked. We await the European Central Bank's interest rate policy response in two weeks time.

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15th February 2023

UK Inflation falls to 10.1%

UK Inflation falls to 10.1%
The annual rate of consumer price inflation fell to a five-month low today, 0.2% below consensus estimates. This made three consecutive months of decreases with the previous month seeing 10.5% headline rates. Despite the positive trend, the UK still remains close to 40-year inflation highs driven largely by soaring housing, bills and food which all hit low income households particularly hard. The 0.4% monthly drop was due to a continued fall in fuel prices as well as in some of the service focused sectors such as restaurants and takeaways. Compared to global peers, the UK is still seeing particularly elevated...

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15th February 2023

US inflation remains sticky

US inflation remains sticky
US Inflation in January was a surprise to the upside notching 0.5% higher month-on-month, whilst annual inflation came in at 6.4%, higher than expected. Housing costs proved to be the biggest contributor to the latest CPI print. Furthermore, last month’s strong gain in the US job market shows how inflation risks becoming more entrenched, which has dashed any hopes from investors expecting a policy pivot in the near-term. Instead, the data suggests that the Federal Reserve will need to keep hiking interest rates into deeper territory and for longer to cool the economy down. The expectation of tighter monetary conditions...

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3rd February 2023

January job growth in the US beats all expectations

January job growth in the US beats all expectations
The US economy added a massive 517,000 jobs in January. This was ahead of even the most ambitious predictions which were in the range of 200,000. This poses an issue for central banks around tackling the issue of inflation in an economy which continues to have a tighter and tighter employment market. Fundamentally inflation is going to have a very hard time getting back to the 2% target without unemployment rising which is completely contra to this type of massive job growth. The market sold off on this news as this means the potential for higher rates for longer.

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2nd February 2023

U.S. Federal Reserve raises rates by 0.25%

U.S. Federal Reserve raises rates by 0.25%
As largely anticipated, the Federal Reserve has delivered another rate hike, but at 0.25% marking a further downshift in their monetary tightening regime. The Feds fund rate now sits at 4.75%. Jerome Powell’s speech, following the latest rate decision was digested favourably by investors as markets received further clarity on the direction of future rate decisions. Markets took comfort in data which suggests the environment is becoming disinflationary, and that higher rates are having the desired effect in cooling prices. However, Powell warned markets that there are still at least two more quarter point hikes to go without any cuts...

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2nd February 2023

UK raises interest rates by half a percentage point

UK raises interest rates by half a percentage point
The Bank of England has followed on the heels of the US Federal Reserve in raising core interest rates. Unlike the US who raised by 0.25% the UK raised by a larger 0.5% which represents the more entrenched inflation problem existing in the UK. Markets have broadly been rallying on these rate hikes as central bankers have accompanied these hikes with talks of being nearly at the end of these sequential raises before they will be in a positon to step back and wait for inflation to begin to come down. The terminal level of rate hikes is something which...

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12th January 2023

US inflation cools further

US inflation cools further
The latest US inflation print shows signs that cost pressures are continuing to ease with headline inflation at 6.5%, whilst core inflation (which excludes food and energy) was up 5.7%, year-on-year. Despite the fact that figures matched median forecasts, they were only modestly welcomed by investors who were expecting a more aggressive downshift in inflation which would allow the Federal reserve to reduce the pace of rate hikes, sooner. Following today’s inflation report, both the S&P 500 and Nasdaq remained flat, whilst two-year treasury yields notched higher.

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6th January 2023

US beats jobs forecast again but with cooling wages

US beats jobs forecast again but with cooling wages
US job creation beats expectation in December coming in at 223,000 Vs expectations of 203,000. This showed a stronger economy with more people employed but what investors were really looking into was the average hourly earnings figure which declined more than expected into the end of the year. This framed an economy in which employment remains strong with wages coming down which could slow inflation without tipping the US into a recession. This was the scenario that investors took from the announcement and is what made the global stock market rally on the news.

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