Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

Solid U.S. Job Growth But Slower Earnings

ByFxPro Financial Services Ltd
AuthorAlexander Kuptsikevich
Published 10/10/2022, 06:31 AM
Updated 03/21/2024, 07:45 AM

The US economy added 263K jobs in September - slightly above forecasts for growth of 250K-255K. The unemployment rate has returned to 3.5% after 3.7%, reversing concerns that there was already a sustained upward trend in the rate. We recall that the Fed expects unemployment to rise to 4% by the end of the year, calling for economic pain to be accepted to suppress inflation.
The US economy added 263K jobs in September
Impressive job growth and falling unemployment rates are fuelling speculation that the Fed will once again raise the rate by 75 points in early November. CME's FedWatch tool indicates that markets have an 82% chance of such an outcome. A week ago, the odds of such an outcome were below 57%, and this shift is lying behind the latest boost to the dollar and the decline in equities.
 
However, the situation is not clear-cut, as rising employment almost paradoxically leads to slower wage growth. After adding 0.3% for the month, hourly earnings added 5.0% y/y against 5.2% a month earlier and a peak of 5.6% in March.
Rising employment paradoxically leads to slower wage growth
Job growth would allow the Fed to take another big step towards a rate hike without fear of bringing down the economy. But already in November, we should expect signals of a further reduction in the pace of rate hikes, which limits the medium-term potential for a stronger dollar and weaker stock markets.

The FxPro Analyst Team

Latest comments

Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.