US jobs might be the trigger that sets the economy into overdrive

5th December 2014 By: Ranko Berich

US Jobs Data – 5/12/14

There’s no two ways about it; the US jobs report is a whopper, showing the fastest monthly rate of jobs creation since 2012. The result is overwhelmingly optimistic for the US labour market and is the first sign of the US economy potentially going into overdrive.

The job creation was broadly based, with manufacturing, retail and professional sectors all adding jobs. Even more encouraging is the fact that Average Hourly Earnings also grew 0.4 per cent – twice the expected rate. With both the impressive headline jobs creation and solid GDP growth, the latest economic data paint a picture of an economy that is firing on all cylinders.

The question now is whether this pace of expansion can be maintained, or if this is just one exceptional blip in an otherwise slow and steady labour market recovery.

If results like this become the norm, USD’s meteoric appreciation will be difficult to stop and tighter monetary policy will become a foregone conclusion. However there is still cause for caution in the US and, with winter looming, if the economy cools with the weather USD is at lofty heights to fall from.