OPINION
Market Rating Before FOMC MeetingJan 31
US Nonfarm Payrolls Exceeds Market Expectations
According to BoLS; In April, non-farm employment in the country increased by 428 thousand. In this period, market expectations for TDI, which increased by 431 thousand in March, were 350 thousand. While the unemployment rate did not change at 3.6 percent in April, average hourly incomes increased by 0.3 percent compared to the previous month and by 5.5 percent on an annual basis.
According to the household survey of BoLS; Labor market growth was generally widespread during this period. The unemployment rate, which was 3.6%, continued to be at the lowest level since February 2020, when the first new type of coronavirus (Covid-19) closures were experienced, while the number of unemployed was recorded at 5.9 million.
Among worker groups, the unemployment rate was 3.5 percent for adult men, 3.2 percent for adult women, and 10.2 percent for the youth category. The number of people on temporary dismissal was 853 thousand, which is close to its value in February 2020. In this period, labor force participation increased by 262 thousand and reached 1.6 million. The labor force participation rate was reported as 62.2 percent.
Employment in the non-farm sectors increased by 55 thousand in the manufacturing industry, 35 thousand in financial activities, 34 thousand in health services, 29 thousand in retail trade, and 9 thousand in the mining sector. Finally, average hourly earnings for all employees on private non-farm payrolls rose 10 cents (0.3 percent) to $31.85 in April.
The data released by BoLS last week revealed that labor market conditions continue to be tight in the world's major economy. In particular, the unemployment rate, which is currently settled at 3.6 percent, showed that the damage due to the coronavirus closures was repaired, while average hourly incomes pointed out that there may be wage pressure in the inflation outlook. Thus, the expectation that the US Federal Reserve (FED) will not slow down the pace of tightening the monetary policy in order to reduce inflation, which is at the peak of 41 years, taking into account the tight conditions in the labor market, gives strength to the dollar. As a matter of fact, with the new week, the dollar index reached the level of 104.06 and tested the peak of 20 years.
