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Peter Davis

An writer at FOMOdrive

  • Jan 05, 2024
  • 2 min read

The dollar fell sharply after news from the US

On Friday, despite strong data from the US labor market, the dollar experienced a decline.

In December, the amount of new jobs created surpassed expectations.

The figures for unemployment rate and average wage growth were higher than anticipated.

Since the start of the year, the USD has seen a significant rise, prompting traders to cash in their profits.

The weak data released on the service PMI index caused a sharp sell-off.

On Friday, the US Bureau of Labor Statistics reported that US nonfarm payrolls increased by 216,000 in December, surpassing the expected 170,000 new jobs.

In December, the unemployment rate stayed the same at 3.7%, contrary to predictions that it would worsen to 3.8%.

The average hourly wages last month rose by 0.4%, higher than the predicted 0.3% month-on-month increase. Additionally, the annual growth of average wages was 0.1% higher than expected, reaching 4.1% y/y. This data is an important indicator of inflation and is indicative of a positive trend.

In December, the number of new jobs in the private non-farm sector was higher than expected, with an increase of 164 thousand jobs. This was a notable increase compared to the growth in public sector employment, which only rose by 52 thousand jobs.

President Joe Biden's statement on December employment data confirmed that 2023 was a great year for American workers. The economy added 2.7 million new jobs in 2023, surpassing the number of jobs created in any year of the previous administration. Additionally, the unemployment rate remained consistently below 4% throughout the year.

Think.ing suggests that the US employment report does not necessitate an immediate cut in Fed rates. Nevertheless, the labor market is cooling, and the fact that employment growth is concentrated in sectors that are usually lower-wage and part-time is a cause for worry. The Fed is likely to wait until May before making any rate cuts.

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