Latest US jobs report smashes expectations
2nd December 2022 13:53
by Victoria Scholar from interactive investor
Investors had been nervous ahead of this data, and for good reason. Stocks reacted negatively to the news but remain volatile. Our head of investment explains what's going on.
The US economy added 263,000 jobs, outpacing expectations for a gain of 200,000 in November and following a similar rise of 261,000 in the previous month. The unemployment rate held at 3.7%, while month-on-month average hourly earnings grew by 0.6% month-on-month topping forecasts for 0.3%.
This month’s labour market report was stronger than expected both in terms of the headline figure and wage growth, underscoring the tightness of the labour market, which remains a bright spot in an otherwise weakening US economy.
- Discover more: Buy international shares | Interactive investor Offers | Most-traded US stocks
In terms of the Federal Reserve’s conundrum, this piece of data muddies the picture for a possible slowdown in rate hikes ahead, given that it suggests the employment market is slowing less than anticipated, adding to price pressures facing the economy.
US futures are trading sharply lower, with the Nasdaq leading the losses down around 2.5%. The US dollar has jumped while short-term interest rate futures have dropped on anticipation that the Fed may not have as much wiggle room to shift towards a more dovish approach to rate hikes in terms of its combat against inflation.
Ahead of the report the US dollar was trading modestly lower. However, the jobs report has bolstered risk-off sentiment with the greenback swinging into the green against most major currencies. Whether this intraday bullishness for the dollar can endure is yet to be seen.
The US dollar strength is weighing on precious metals with gold, platinum and palladium trading sharply lower.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.