Following a robust Non-Farm Payroll (NFP) report last month, the anticipation was palpable as the market awaited another eagerly awaited report this Friday. However, it brought an unexpected twist in contrast to the previous upside surprise.
The jobs market took an unexpected turn, contracting from a revised 297,000 to 150,000, falling short of the 180,000 consensus. Additionally, the unemployment rate defied expectations by rising to 3.9%, surprising the market, which had anticipated a steady 3.8% figure.
The softness continued with the average hourly earnings, which shifted from 0.3% to 0.2% on a month-over-month basis. On a year-over-year scale, the figure slipped from 4.3% to 4.1%, though it remained slightly above the 4% forecast.
With these unexpected outcomes in the labour market, there could be significant implications on how the market perceives the Federal Reserve’s final interest rate decision for the year in December. The market’s sentiment may lean even further toward the possibility of a pause, reflecting the cooling trend in the labour market.
Sources: U.S. Bureau of Labour Statistics
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
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