After the release of US nonfarm payrolls, all eyes are always on the Federal Reserve’s policy moves. According to the US Bureau of Labor Statistics, the number of jobs significantly increased in November following a near standstill in the previous month. No wonder, investors are keeping their finger on the pulse of employment trends.
As for the latest NFPs, the US public and private sectors added 227,000 jobs compared to October's revised figure of 36,000. The unemployment rate in the US inched up to 4.2% as expected, driven by a decrease in the labor force participation rate and a decline in the labor supply. A broader measure, which includes those not working and part-time employees, increased to 7.8%.
On the plus side, wages for employees continued to rise. Average hourly earnings grew by 0.4% for the month and 4% from a year ago, with both figures exceeding expectations by 0.1%.
Following the release of the official employment data, stock market futures gained ground, while Treasury yields went down. The US dollar followed suit. Its index dropped to a one-month low of 105.42. Although the initial reaction to the report was negative, the US dollar index later trimmed losses, closing near 105.61.
The report boosted market expectations for another rate cut by the Federal Reserve in December. This scenario was anticipated by 88% of respondents, putting additional pressure on the US currency.
Previously, Federal Reserve Chairman Jerome Powell emphasized that strong economic health allowed for patience in making decisions on interest rates. Other FOMC policymakers stated they were open to further rate cuts, depending on economic metrics.
