Drop in wage earning overshadow rise in nonfarm payrolls, hurting USD

US nonfarm payrolls data released on Friday were better-than-expected however the dollar fell against most major counterparts.

According to data published by the US Labor Department, 252,000 nonfarm jobs were added in December, above consensus forecasts for 240,000 jobs. The figure was still down from 321,000 in November.

On the bright side, the unemployment rate fell more than expected to 5.6 percent from 5.8 percent, the lowest since June 2008.The continued drop in the unemployment rate is further signs of labor market tightening but wage growth continues to be lackluster. Wages fell after rising sharply in November.

Average hourly earnings dropped 5 cents to $24.57 and are up just 1.7 percent over the past 12 months, below the meager 2 percent annual pace that has prevailed throughout the recovery. The failure of wage gains to accelerate with a tumbling unemployment rate has been the biggest missing piece of the labor market’s strong showing this year.

USD/JPY fell as a result of the NFP data, reaching down to 118.10 by early Monday trading.

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