The U.S. Non-Farm Payrolls (NFP) report for June 2023 delivered an unexpected downside surprise, with 209,000 new jobs added to the US labour force, lower than the 230,000 estimated and significantly down from May’s 339,000 figure. The most recent FOMC minutes meeting indicated a distinct divide between members, with some supporting the decision to pause interest rates in June and some believing a subsequent rate hike was necessary. With that in mind, the much-anticipated U.S. Non-Farm Payrolls (NFP) report for June supports the decision to pause interest rates, but is the downside surprise enough for Jerome Powell to avoid hiking rates come the next meeting?
The unemployment rate remained steady, ticking down to 3.6% in June, down from 3.7% in May, while the number of unemployed persons decreased to 6 million. Annual wage inflation, as measured by Average Hourly Earnings, came in unchanged at 4.4%. Amidst uncertainty, the mixed jobs data reignited selling pressure on the US dollar while market participants are left to ponder how the FED plans to pave the way for inflation to edge lower toward the much-desired 2% target rate.
Sources: Bloomberg, U.S. Bureau of Labor Statistics, Trading View
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