Solid US Job growth but slower earnings

Expert market comment from Alex Kuptsikevich of the FxPro Analyst Team: Solid US Job growth but slower earnings
FxPro | 1018 days ago

Solid US Job growth but slower earnings

The US economy added 263K jobs in September - slightly above forecasts for growth of 250K-255K. The unemployment rate has returned to 3.5% after 3.7%, reversing concerns that there was already a sustained upward trend in the rate. We recall that the Fed expects unemployment to rise to 4% by the end of the year, calling for economic pain to be accepted to suppress inflation.

Impressive job growth and falling unemployment rates are fuelling speculation that the Fed will once again raise the rate by 75 points in early November. CME's FedWatch tool indicates that markets have an 82% chance of such an outcome. A week ago, the odds of such an outcome were below 57%, and this shift is lying behind the latest boost to the dollar and the decline in equities.

However, the situation is not clear-cut, as rising employment almost paradoxically leads to slower wage growth. After adding 0.3% for the month, hourly earnings added 5.0% y/y against 5.2% a month earlier and a peak of 5.6% in March.

Job growth would allow the Fed to take another big step towards a rate hike without fear of bringing down the economy. But already in November, we should expect signals of a further reduction in the pace of rate hikes, which limits the medium-term potential for a stronger dollar and weaker stock markets.

 

By the FxPro Analyst Team 

Regulation: FCA (UK), SCB (The Bahamas)
read more
ATFX ​Market Outlook 25th July 2025

ATFX ​Market Outlook 25th July 2025

US initial jobless claims dropped to a three-month low last week, while June’s new home sales showed a slight rise. The S&P 500 and Nasdaq closed at record highs on Thursday, boosted by strong earnings from Google’s parent, Alphabet, which sparked optimism in other major AI-related stocks. Conversely, Tesla shares fell after the company reported disappointing earnings.
ATFX | 3h 18min ago
GBPUSD recovery faces key test

GBPUSD recovery faces key test

GBPUSD retraces half of July’s losses, edges above short-term SMAs. Technical risk is skewed to the upside, but another challenge looms near 1.3635.
XM Group | 21h 38min ago
EU and US close to a trade deal ahead of ECB decision

EU and US close to a trade deal ahead of ECB decision

After Japan, the US is nearing a trade accord with the EU - S&P Global PMIs in focus ahead of next week’s FOMC decision - ECB to stand pat, Lagarde’s signals to be key for the euro - S&P 500 hits a new record high, but earnings results come in mixed
XM Group | 21h 38min ago
The crypto market nosedive

The crypto market nosedive

Expert market comment made by Chief Market Analyst Alex Kuptsikevich of the FxPro Analyst Team: The crypto market nosedive
FxPro | 23h 4min ago