The U.S. nonfarm payroll increased by 199,000 jobs last month, surpassing economists’ expectations of 180,000 roles

increase interest rates

The U.S. nonfarm payroll increased by 199,000 jobs last month, surpassing economists’ expectations of 180,000 roles.

Investors’ hopes for an interest rate hike pause increased due to a better-than-expected non-farm payrolls report. Today morning, the U.S. Bureau of Statistics released last month’s non-farm payrolls report. According to market estimation, the numbers were high, both in terms of added job numbers and average hourly earnings. The reports are as informative as the other data, which suggests that the economy is as strong as it was before.

More of the same is what the investors hope from this report. As for the report, nonfarm payrolls increased by 199,000 jobs last month. The number is slightly higher compared to economists’ expectations of 180,000 roles. Job gains were notable in sectors like health care and government, with the end of automotive industry strikes contributing to more positions in manufacturing.

Average hourly earnings, a key indicator of wage growth, rose by 0.4% monthly, exceeding predictions of 0.3%. On a month-to-month basis, the average hourly earning has accelerated from the previous month’s 0.2%. Tamed inflation has a significant impact on average hourly earnings. Besides being an indicator of growth, the AHE is also a crucial asset that helps estimate the impact of inflation on the economy.

Moreover, the unemployment rate unexpectedly dropped to 3.7%, adding complexity to the narrative that the Federal Reserve’s tightening monetary policy was cooling labor demand.

Yet, the tightening macroeconomic policy impact on the labor market remains a controversial subject, as the data suggest that the labor market was cold during the first six highly aggressive interest rate hikes.

As for the policymaker’s next move, the Federal Reserve’s focus is on tightening monetary policy, raising borrowing costs from 5.25% to 5.50%. The Fed aims to loosen the job market. A slowdown in demand for workers could help ease upward pressure on wages, aligning with the Fed’s goal of mitigating elevated inflation.

Meanwhile, live from the stock market, Wall Street Main Industries declined slightly from the opening rally. The S&P 500 benchmark was revised to +0.09% and stands at 4,588.99 basis points. Unlike the previous session, the tech-heavy composite Nasdaq rose only by 0.1% and stands at 14,352.8 bps. The down Jones average industrial added 0.01% to a total of 36,145.8 basis points.

Moving to the oil market, after hitting its lowest market price for the first time in the past six months, oil prices jumped. Hours after the release of the non-farm payroll report, the oil process gained some momentum. Beten oil rose by 1.72% and stands at $75.8 per barrel. The West Texas inflation rate rose by 1.9% to the current market price of $70.65.

Another contributing factor to the oil price rally was the integration of Saudi Arabia and Russia; by that, we mean the oil production cuts. Saudi Arabia and Russia urged OPEC+ members to stick to output-cut agreements, which initially met with market skepticism. Both nations led OPEC+ in supply reductions over the past year to boost oil prices.

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