05/07/2021

Market report: US job numbers beat expectations


USD

The eagerly anticipated non-farm payrolls were released on Friday. This is the total number of paid workers in the US minus farm, government, private household and non-profit organisation employees.

In June, American job creation came in well over expectation, adding 850,000 jobs. The prediction was just 700,000. The hospitality sector was the largest beneficiary. This is unsurprising as the vaccination drive and a drop in Covid-19 cases has seen many Americans return to near normality.

However, unemployment unexpectedly climbed to 5.9% from 5.7% as more Americans seek work. The overall number still wasn’t strong enough for any speculation on Federal Reserve policy tapering. Had the payroll number been weaker, higher wage inflation may have been possible as employers attempt to entice workers.

Wage data also disappointed as average hourly earnings rose 3.6% year-on-year, lower than the 3.7% anticipated. Ultimately, the data will not drive anyone away from the 2023 expected hike, hence the overall muted reaction.

Key announcements

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