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 | 1022 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 29th July 2025

ATFX Market Outlook 29th July 2025

U.S. stocks finished mixed on Monday, with the S&P 500 advancing for a sixth consecutive session to reach another record close. The Nasdaq also hit a new all-time closing high amidst volatile trading, as investors gauged the impact of the US-EU trade agreement and prepared for key events later this week. The Dow Jones declined by 0.14%, while the Nasdaq increased by 0.33%
ATFX | 1h 31min ago
US data supports patient Fed, deal with EU boosts appetite

US data supports patient Fed, deal with EU boosts appetite

Dollar gains as data allow the Fed to stay in wait-and-see mode - US and EU secure trade deal, tariff clock is ticking for others - Wall Street at record highs amid trade optimism and better earnings - Pound slides after retail sales, yen retreats even as BoJ hike bets increase
XM Group | 18h 49min ago
Gold Declines as EU Strikes Trade Deal

Gold Declines as EU Strikes Trade Deal

Gold held steady at $3,330 per troy ounce on Monday following three consecutive days of declines. The metal faced downward pressure after news emerged of a trade agreement between the US and the EU, dampening investor interest in safe-haven assets.
RoboForex | 20h 19min ago
Markets Rise on Extended US-China Tariff Pause

Markets Rise on Extended US-China Tariff Pause

Markets rallied as the US and China are set to extend their tariff pause by 90 days, boosting risk sentiment and weakening the US Dollar. Gold slid below $3,350, while GBP and EUR gained. AUD held steady ahead of key CPI data. Investors now await the FOMC meeting and US job reports for further direction.
Moneta Markets | 20h 54min ago