Employment in the US is growing much faster than expected! The latest NFP report shocked the markets

Dov Herman

3 years ago

The most important information of the Friday session was undoubtedly the publication of the BLS report on the American labor market. After the result of 263 thousand. new jobs in the non-agricultural sector (NFP) from September 2022, in the October report, economists expected a slight deterioration of the situation and the result at the level of 200 thousand. However, as it finally turned out, the BLS report shows that in October this year. the American economy has created as many as 261,000 new jobs.

NFP at the level of 261,000

According to the latest report of the American employment office (BLS), the change in employment in the non-agricultural sector (NFP) in October 2022 amounted to 261 thousand. posts. The positive tone of this publication was also supported by the positive revision of last month’s reading (to 315,000 from 263,000) and data on wage inflation. It turned out that the average hourly wage increased by as much as 0.4% on a monthly basis. It is worth noting, however, that despite the change in employment by as much as 261,000 and the positive revision of the previous reading, the unemployment rate unexpectedly rose to 3.7 percent after it fell from this level to 3.5 percent a month ago.

NFP: 261 thousand, forecast 200 thousand, previously 315 thousand (positively revised from 263 thousand)
Unemployment rate: 3.7%, forecast 3.6%, previously 3.5%
Average hourly earnings m / m: 0.4%, forecast 0.3%, previously 0.3%
Average hourly earnings y / y: 4.7%, forecast 4.7%, previously 5.0%

– A very strong increase in employment, but at the same time we have a significant increase in the unemployment rate! In fact, we are back to August data. Considerable decline in wage growth, but in line with expectations. Monthly wages are rising a bit more, however. Nevertheless, the labor market remains really strong, which is visible through a very strong revision of the previous reading, XTB economists point out.

The dollar is (not) gaining

Looking at the quotations of the EUR / USD currency pair, we notice that although in the first reaction to the publication of the NFP report, the US dollar was clearly gaining, it gave up profits very quickly, and with a considerable interest.
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XTB experts attribute this reaction to the publication of the latest results of the household survey, which shows that employment, however, fell by as much as 328,000.

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