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A strong employment gain should trigger wages rebound

Our econometric model indicates that non-farm payrolls increased by as much as 250,000 in January, which would broadly match the increase in December. As a result, we expect the unemployment rate to fall to 5.5%. Unless it is accompanied by a rebound in wage growth, however, a further decline in the unemployment rate isn't going to persuade markets that the Fed will move earlier on its rate hikes.

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