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Peter Davis

An writer at FOMOdrive

  • Oct 06, 2023
  • 2 min read

The dollar soared after unexpected news from the US

On Friday, data on the US labor market was released, causing the dollar to experience a sharp rise.

In September, the number of new jobs was nearly double what was anticipated.

The data regarding the unemployment rate and average wage growth did not meet expectations.

The dollar index is attempting to rebound from its two-day decrease and ascend above the 107 mark once more.

On Friday, the US Bureau of Labor Statistics reported that US nonfarm payrolls had increased by 336,000 in September, significantly surpassing the expected addition of 170,000 jobs. Additionally, the data for the preceding month was revised upwards by 40,000.

The unemployment rate in September stayed the same as in August, at 3.8%, even though it was predicted to go down to 3.7%. This figure is the highest it has been in the past eighteen months.

The latest data on average wage growth, a key measure of inflation, was worse than anticipated. Average hourly wages increased by 0.2% from the previous month, which was lower than the predicted +0.3% m/m.

Average wages in annual terms grew worse than expected, with a rate of +4.2%, lower than the previous month's forecast of +4.3% y/y.

In September, the private non-agricultural sector saw an increase of 263 thousand jobs, while the public sector saw an increase of 73 thousand jobs.

Jerome Powell, the Chairman of the Federal Reserve, recently declared that the central bank would be "cautious" when making their next rate decisions. Numerous Fed officials have highlighted that the regulator can take their time and be "patient" after increasing rates significantly in the past 18 months.

On Thursday, Mary Daly of the San Francisco Federal Reserve stated that there is no need to "hastily make any decisions" since "monetary policy is already tight and financial conditions are stringent."

The likelihood of a Fed rate hike at the November gathering rose to 30.7% from 20.1% the preceding day; meanwhile, the probability of a hike at the December meeting increased to 45% from 33.1% the day before.

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