Employment Report Unlikely To Change Near-Term US Policy Outlook

Today's December employment report shouldn't change much on the near-term policy outlook.

• While the -140k headline figure was a disappointment vs +50k consensus, it was almost perfectly offset by +135k cumulative revisions to the previous two months' job gains, and the unemployment rate was unchanged at 6.7%.
• As Fed Chair Powell among others has indicated, the FOMC is already of the mind that the COVID lockdowns are affecting some sectors more than others (the hospitality sector lost ~500k jobs in Dec), and that targeted gov't policy and not monetary policy is the right approach. We await comments by Fed Vice Chair Clarida (1100ET) on the economic / mon pol outlook.
• As for fiscal policy, this wasn't enough of a negative report to get the juices flowing on bigger fiscal stimulus than has already been discussed by the incoming Biden administration, nor so good that it'll nudge fiscal conservatives to sit more firmly on the sidelines.
• There is some talk about strong wage growth (avg hourly earnings +5.1% Y/Y vs +4.5% expected) but this appears to be a product of lower-wage positions being lost rather than a sudden "real" surge in workers' wages.