US labour market shows solid growth
BY Janne Muta|May 5, 2023
The April Non-Farm Payrolls (NFP) report was released today, revealing stronger-than-expected growth in the US labour market. US non-farm payrolls increased by 253K, surpassing the expected 180K. This signals continued recovery and expansion in the economy.
The unemployment rate also improved, dropping to 3.4% compared to the expected 3.6% and the previous month's 3.5%. This decrease indicates a tighter labour market as economic conditions improve. The labour force participation rate remained unchanged at 62.6%, reflecting a stable workforce in the economy. The employment market has slowed down but remains solid.
Average hourly earnings increased by 0.5% month-over-month, outperforming the expected 0.3% increase. This demonstrates that employers are offering higher wages to attract and retain workers in a competitive labour market. Furthermore, average hourly earnings grew by 4.4% year-over-year, again beating expectations of a 4.2% increase. This growth showcases sustained wage gains for workers and indicates inflation could be stickier than earlier expected. Lastly, average weekly hours remained constant at 34.4, meeting expectations and indicating a stable workweek for employees.
In conclusion, the April NFP report highlights a robust labour market with better-than-expected job growth, declining unemployment, and rising wages. These positive indicators should contribute to continued economic expansion in the coming months and alleviate the biggest recession worries. The report seems to be overall supportive of equities. The initial reaction in the USD was bullish, but the Federal Reserve is unlikely to make decisions based solely on one set of numbers. Instead, they are expected to monitor several NFP releases before making decisions on future monetary policy. Therefore, the markets are not likely to give this report overly strong weight when anticipating the future course of the dollar and dollar-priced assets.
Chief Market Analyst
DISCLAIMER: TIOmarkets offers exclusively consultancy-free service. The views expressed in this blog are our opinions only and made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances, or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval.
Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.
Gold technical analysis | Can XAUUSD maintain current Price levels?
Gold Technical Analysis - Dollar weakness, spurred by likely dovish shift in Fed policy, has bolstered gold prices. However, it's noteworthy that when gold has rallied to levels it is trading...
USDJPY Technical Analysis | USD under pressure as stable PCE hints at Fed shift
USDJPY Technical Analysis - The latest PCE report from the U.S. Commerce Department signals positive trends in inflation and consumer spending. A key highlight is the core Personal Consumptio...
Dow Jones Technical Analysis | Rallying DJIA hits new yearly high
Dow Jones Technical Analysis – Dow Jones technical analysis - The market has rallied over 11% in just 5 weeks, moving well beyond the July High of 35,679. This rally, marking the strongest 5-...
Trade responsibly: CFDs are complex instruments and come with a high risk of losing all your invested capital due to leverage.