US jobs reports paint a good picture for the North American employment sector - Market Overview

US jobs reports paint a good picture for the North American employment sector - Market Overview

Although the long-awaited employment figures released on Friday were not as optimistic as forecasted, they continued to show signs of recovery in the jobs market.

Although the non-farm payroll figure disappointed the markets, revealing a 235k growth vs 750k expected, the previous month's figure was revised up to 1053k. So, the average job creation in recent months is still at a level high enough for the unemployment rate to continue decreasing. The unemployment rate for August fell to 5.2% from 5.4% in July.

The drop in the number of jobs created was already being heralded by other indicators such as the ADP non-farm employment and the employment components of the manufacturing PMI. The fall in industrial activity due to supply chain bottlenecks and the delta outbreak are some of the reasons for the slowdown that has affected the labor market. But even so, the unemployment rate continues to fall. In any case, this is the data that the Fed has set itself as a target for its monetary policy.

Without ruling out the still problematic issue of price increases, inflation does not yet show clear signs of relaxation. The hourly average earnings component of the employment data published on Friday showed another rebound to 4.3% year-on-year, from 4.1% the previous month. These levels are well above averages and, together with the increase in the price of raw materials and logistics costs, they could cause more concerns for the Fed.

The proof that the employment data does not rule out Fed’s possible decision to reduce bond purchases is the performance of Treasury bonds. The 10-year bond, Tnote, after a rapid and short-lived upward move, ended the day with losses that raised its yield by 4 bps to 1.33%.

Although it might be true that the data could delay the decision of reducing bond purchases, the fixed income market does not seem to be affected by it.

However, the foreign exchange market, which is usually more sensitive to this type of data, was somewhat indecisive. The US Dollar, losing its correlation with treasury bonds yields, retreated, although not too much.

EUR/USD jumped to the main resistance zone at 1.1906, then reversed this path and returned to the starting point at 1.1875.

In short, we could observe a general lack of decision in the market when interpreting the employment figure. From now on this month, in addition to the statement from the Federal Reserve Meeting, the price components will be closely monitored in the leading indicators scheduled for publishing and the upcoming employment components.

Sources: Bloomberg, reuters.com.

Informațiile prezentate în acest document sunt pregătite de Miguel A. Rodriguez și nu au intenția de a constitui consultanță pentru investiții. Informațiile din acest document sunt furnizate drept o comunicare generală de marketing cu scop informativ și, ca atare, nu au fost pregătite în conformitate cu cerințele legale concepute pentru a promova cercetările independente în domeniul investițiilor și nu sunt supuse niciunei interdicții de abordare înainte de diseminarea cercetărilor de investiții. Nu au în vedere obiective specifice de investiții, situații financiare sau nevoi specifice ale vreunui destinatar.

Utilizatorii/cititorii nu ar trebui să se bazeze exclusiv pe informațiile prezentate aici și ar trebui să facă propriile lor cercetări/analize, prin citirea cercetărilor de bază.

Key Way Investments Ltd nu influențează și nici nu are vreo contribuție la formularea informațiilor conținute de acest document. Conținutul acestui document este generic și nu ia în considerare circumstanțele personale ale fiecărui individ, experiența de investiții sau situația financiară actuală.

Prin urmare, Key Way Investments Ltd nu va accepta nicio responsabilitate pentru eventualele pierderi ale traderilor datorate utilizării sau conținutului informațiilor prezentate în acest document. Performanța din trecut nu este un indicator viabil pentru rezultate viitoare.