empty
 
 
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

04.12.202212:41 Forex Analysis & Reviews: NonFarm Payrolls report took currency traders by surprise

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Exchange Rates 04.12.2022 analysis

U.S. employers added more jobs than projected and wages rose the most in almost a year, indicating lingering inflationary pressures that raise the likelihood of an interest rate hike by the Federal Reserve. This came as a complete surprise to the dollar bears and caused the dollar to significantly strengthen.

NonFarm Payrolls increased by 263,000 in November, the Bureau of Labor Statistics announced on Friday. Data for October was revised higher to show payrolls rising 284,000 instead of 261,000 as previously reported. About 186,000 people left the labor force, keeping the unemployment rate unchanged at 3.7%. Average hourly earnings rose twice as much as forecast after data for October was revised higher.

Exchange Rates 04.12.2022 analysis

Average estimates in the economists' survey called for an increase of 200,000 wages and a jobless rate of 3.7%. U.S. stocks opened lower and Treasury yields rose as investors anticipated a more aggressive stance by the Fed.

"The net read is that the labor market is still far too tight and cooling only very gradually," Mizuho economists Alex Pelle and Steven Ricchiuto said. "It suggests that the economy is resilient and can handle more rate hikes and restrictive policies for longer."

The gains in employment were concentrated in several categories, led by the leisure and hospitality sector, as well as healthcare and social assistance industries. But retail trade employment fell with most of the losses in general merchandise stores. Transportation and warehousing payrolls also decreased, as well as temporary help jobs falling due to downsizing.

The EURUSD lost 1000 momentarily on this news:

Exchange Rates 04.12.2022 analysis

Higher-than-expected wage growth highlights the continued strength of the labor market despite rising interest rates and fears of an impending recession. The persistent mismatch between supply and demand for workers continues to support wage growth and has led many economists to expect businesses to be more hesitant to lay off workers in the event of a potential economic downturn.

Nevertheless, some sectors are beginning to show more visible signs of easing. Many economists expect unemployment to rise next year - in some cases significantly - as tighter Fed policies risk pushing the U.S. into recession.

This is the last employment report that Fed officials will have at their disposal before the December policy meeting, at which the central bank is expected to scale back the pace of its interest rate hikes to a still aggressive half a percent. Inflation data from last month showed that price pressures are slowly easing but remain very elevated.

Andrey Shevchenko
Analytical expert of InstaForex
© 2007-2024

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.

Turn "Do Not Track" off