The Day at a Glance | February 3 2023

*The US employment report surprised by logging more than 500 thousand jobs in January, almost three times (2.75x) the estimated number.

*Consumer confidence in Mexico continued recovering through January.

*Inflation for producers in the Eurozone decreased for a fourth consecutive month by logging a 24.6% annual figure, despite the 1.1% monthly rate (which set above the estimated -0.4%).

*PMI`s in China returned to expansionary territory in January after four consecutive months of setting below the 50 point threshold. The composite indicator set at 51.1 points (+2.8 points), while the one for services reached 52.9 points (+4.9). 

*January`s PMI`s in the Eurozone were revised upwards slightly. The figures were revised upwards 0.1 points with respect to their initial readings. With this, the service and composite indicators set at 50.8 and 50.3 points, respectively. 

Economic environment

The January employment report showed the creation of 517,000 jobs in the US, overwhelmingly exceeding the 188,000 jobs the market expected. The number of jobs created in the month is almost 300,000 more than the 223,000 recorded in December and 2.75 times greater than what was estimated. All sectors reported new positions, with services standing out with a record of 314,000 jobs. The surprise in job creation was also accompanied by a marginal increase in the labor force participation rate to 62.4% (from 62.3% prior and estimated for this month) and a decrease in the unemployment rate to 3.4%, which was expected to grow to 3.6% from the 3.5% logged in December. Finally, the average hourly wage increased 0.3% – the same as in December (and in line with estimates), which resulted in an annual 4.4% increase, higher than the expected 4.3%. However, it showed a marginal moderation compared to the previous 4.6%. With this context, the DXY dollar index increased 0.93% minutes after the employment revealed a 102.6 points figure, while the 2-year Treasury bond exceeded 4.25% – higher than the 4.10% this morning.

The Consumer Confidence Indicator registered a monthly increase of 1.5 points. The five components that make it up recorded increases compared to the previous month. The item that reported the greatest improvement is the current outlook compared to a year ago, durable goods purchases, with a monthly increase of 1.8 points and 2.1 points compared to the same period last year; however, this component has lagged the most, with a reading of 26.3 points in January of this year. In addition, the component that captures the expectation of household members’ economic situation within a year compared to today reached 57 points, the highest level among the components, after a monthly increase of 1.5 points and 0.7 points compared to January 2022. However, the expectation of the country’s economic situation expected within 12 months compared to the current one fell -0.2 points in relation to January of last year despite the monthly increase of 1.4 points. The results indicate an improved outlook among consumers at the start of the year – and certain optimism for 2023. Moreover, this was accompanied by more willingness to carry out purchases, which should also have a positive impact on demand indicators.