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Analysis

NFP +339K beats analyst consensus prediction

BY Janne Muta, M.Sc in Finance

|június 2, 2023

Today's NFP report (+339K) delivered excellent news, surpassing analysts' expectations and signalling strong growth in the labour market. Contrary to predictions of 193K new jobs created in May, the actual figure exceeded forecasts by a wide margin, representing a significant upswing in employment opportunities.

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This suggests continued economic expansion. However, at the same time, the unemployment rate ticked higher by 0.2% causing some questions on the health of the employment market. Average hourly earnings dipped to 0.3% from 0.4% prior and came in line with expectations.

It was our expectation that the number was going to beat analysts' expectations. Our view was based on the strong trends in the recent employment-related data. The ADP report revealed exceptional performance, with private businesses in the United States generating a remarkable 278K jobs during May and this time the ADP was indeed a decent predictor for the official payroll number.


The JOLTS report also bolstered the positive labour market narrative, revealing a substantial increase of 358K job openings, reaching a total of 10.1 million. This surge exceeded market expectations and marked a rebound from lower figures observed in the previous two months.

In addition, initial jobless claims remained below market forecasts, further highlighting the tightness in the US labour market. Despite a marginal increase of 2,000 claims from the previous week to 232K, the current levels are significantly below the highs witnessed in March.

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While average hourly earnings growth has decelerated compared to the previous month, it is important to note that April witnessed the fastest increase in nine months. The ADP report highlights a slight slowdown in wage increases for both job changers and individuals remaining in their positions. Therefore, the 0.2% lower in average hourly earnings wasn’t surprising.


Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets

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Janne Muta, M.Sc in FinanceChief Market Analyst

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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