NFP: Only 209K new jobs!

BY Janne Muta

|July 7, 2023

The recent employment-related data suggested the labour market was still strong. However, this time the analyst consensus got it right: With only 209K new jobs added, the labour market could be cooling. While one data point doesn’t create a trend the significantly lower NFP number together with a stagnating wage growth suggests the peak in hiring in the US could indeed be here. The unemployment rate remained unchanged and the average hourly earnings m/m ticked higher by 0.1% to 0.4%.

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Analysts expected to see the jobs growth slowing down significantly from a month ago but now the NFP number didn’t even reach the analyst predictions. This raises concerns that the US economy could be headed to a period of cooling economy with the Fed that has promised to keep on fighting inflation.

The market reaction is mixed. Equities are see-sawing after the NFP release. This indicates that even though the July 25 bp rate hike is widely expected some investors aren’t ready to sell the stocks in the hope that the lower-than-expected employment number may deter the Fed from hiking rates over the rest of the year. The USD sold off allowing gold to react positively.

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Janne Muta
Chief Market Analyst

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Janne Muta

Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.

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