I. economic and market review last week:
Last week, the market became more worried about the Fed's table contraction, the yield of us 10-year Treasury bonds rose sharply by 25.2bp, US technology stocks pulled back significantly, and China's growth sector also fell under pressure. The commodity market is still divided.
Top five gainers and losers of Chinese commodities: lpg11 72%, coke 8.52%, ethylene glycol 7.53%, iron ore 7.09%, glass 7.08%; Jujube - 7.97%, Huyin - 3.49%, vegetable oil - 2.97%, stainless steel - 1.44%, Shanghai copper - 0.72% precipitation capital inflow and outflow top five (100 million yuan): palm 6.27, Hujin 4.47, Shanghai aluminum 3.24, crude oil 3.20 and asphalt 3.16; Hutong-6.79, liandou-2.11, vegetable oil-1.41, methanol-1.11 and jujube-0.99 plate precipitation capital inflow and outflow (100 million yuan): energy and chemical industry 19.03, nonferrous metals 15.52, precious metals 6.51, black building materials 6.39, Shenzhen Agricultural Products Group Co.Ltd(000061) 4.30
II. Focus this week:
The United States added 199000 non-agricultural workers in December, significantly lower than the expected value of 400000; The average hourly salary increased by 0.61% month on month, significantly higher than the expected value of 0.4%. What do you think of the December U.S. employment and wage data?
First, the low new non farm employment in the United States in December is related to the tight labor supply. Non farm employment in the United States has entered a slow growth stage, and it is expected that about 200000 new non farm jobs will be added every month in the future. The United States added 249000 non-agricultural crops in November and 199000 in December respectively, which was at the level of 200000 before the epidemic for two consecutive months. At present, the number of unemployed in the United States is only about 600000 higher than before the epidemic, and there is little room for further decline. In December, the number of non labor force willing to work in the United States was only 700000 higher than that before the epidemic. This also means that there is limited space for the growth of American labor force in the future. Due to the tight labor supply in the United States, the non-agricultural employment in the United States has been and will continue to grow slowly, and it is expected to increase by about 200000 per month in the future.
Second, the tight labor supply led to a rapid rise in wages in the United States in December. This high probability will last for a long time, bringing sustained pressure on US inflation. The Fed may therefore accelerate monetary tightening in the future. The average hourly wage of private Non-agricultural enterprises in the United States increased by 0.61% quarter on quarter in December, significantly higher than the monthly average level of 0.24% in 2019. This is mainly due to the tight labor supply in the United States. In November 2021, the number of non-agricultural job vacancies in the United States reached 10.56 million, still 3.55 million higher than before the epidemic. Since August 2021, the number of non-agricultural job vacancies has fluctuated at a high level, and there is no significant downward trend.
Even if the non labor force with willingness to work in the future drops to the pre epidemic level, it can only fill 700000 job vacancies, and the number of non-agricultural job vacancies will still be about 2.85 million higher than before the epidemic. This means that the tight labor supply in the United States is difficult to solve in the short term. This will bring sustained inflationary pressure to the United States. The Fed may therefore accelerate monetary tightening in the future.
Risk tip: transmission of Omicron mutant virus
(source: CITIC futures)
